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Tesla Inc  (NAS:TSLA) Operating Income: $-253 Mil (TTM As of Dec. 2018)

Tesla Inc's Operating Income for the three months ended in Dec. 2018 was $419 Mil. ts operating income for the trailing twelve months (TTM) ended in Dec. 2018 was $-253 Mil.

Warning Sign:

Tesla Inc had operating loss over the past 3 years.

Operating Margin % is calculated as Operating Income divided by its Revenue. Tesla Inc's Operating Income for the three months ended in Dec. 2018 was $419 Mil. Tesla Inc's Revenue for the three months ended in Dec. 2018 was $7,226 Mil. Therefore, Tesla Inc's Operating Margin % for the quarter that ended in Dec. 2018 was 5.80%.

Good Sign:

Tesla Inc operating margin is expanding. Margin expansion is usually a good sign.

Tesla Inc's 5-Year average Growth Rate for Operating Margin % was 7.60% per year.

Operating Income or EBIT is linked to Return on Capital for both regular definition and Joel Greenblatt's definition. Tesla Inc's annualized ROC % for the quarter that ended in Dec. 2018 was 11.45%. Tesla Inc's annualized ROC (Joel Greenblatt) % for the quarter that ended in Dec. 2018 was 8.25%.

Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

* Premium members only.

Tesla Inc Annual Data

Dec09 Dec10 Dec11 Dec12 Dec13 Dec14 Dec15 Dec16 Dec17 Dec18
Operating Income Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only -186.69 -716.63 -667.34 -1,632.09 -252.84

Tesla Inc Quarterly Data

Mar14 Jun14 Sep14 Dec14 Mar15 Jun15 Sep15 Dec15 Mar16 Jun16 Sep16 Dec16 Mar17 Jun17 Sep17 Dec17 Mar18 Jun18 Sep18 Dec18
Operating Income Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only -598.14 -596.97 -517.96 442.94 419.15

Calculation

Operating income, is the profit a company earned through operations. All expenses, including cash expenses such as cost of goods sold (COGS), research & development, wages, and non-cash expenses, such as depreciation, depletion and amortization, have been deducted from the sales.

Tesla Inc's Operating Income for the fiscal year that ended in Dec. 2018 is calculated as

Operating Income(A: Dec. 2018 )
=Revenue-Cost of Goods Sold-Selling, General, & Admin. Expense
=21461.268-17419.247-2834.491
-Research & Development-Depreciation, Depletion and Amortization-Others
-1460.37-1901.05--1901.05
=-253

Tesla Inc's Operating Income for the quarter that ended in is calculated as

Operating Income(Q: Dec. 2018 )
=Revenue-Cost of Goods Sold-Selling, General, & Admin. Expense
=7225.873-5782.973-667.452
-Research & Development-Depreciation, Depletion and Amortization-Others (1)
-356.297-496.737--496.737
=419

Operating Income(Q: Dec. 2018 )
=EBITDA-Depreciation, Depletion and Amortization-Others (2)
=903.416-496.737--12.472
=419

Operating Income for the trailing twelve months (TTM) ended in Dec. 2018 was -596.974 (Mar. 2018 ) + -517.958 (Jun. 2018 ) + 442.941 (Sep. 2018 ) + 419.151 (Dec. 2018 ) = $-253 Mil.

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

Explanation

1. Operating Income or EBIT is linked to Return on Capital for both regular definition and Joel Greenblatt's definition.

Tesla Inc's annualized ROC % for the quarter that ended in Dec. 2018 is calculated as:

ROC %(Q: Dec. 2018 )
=NOPAT/Average Invested Capital
=Operating Income*(1-Tax Rate)/( (Invested Capital (Q: Sep. 2018 ) + Invested Capital (Q: Dec. 2018 ))/2)
=1676.604 * ( 1 - 9.43% )/( (13320.485 + 13208.996)/2)
=1518.5002428/13264.7405
=11.45 %

where

Invested Capital(Q: Sep. 2018 )
=Book Value of Debt + Book Value of Equity - Cash
=Long-Term Debt & Capital Lease Obligation + Current Portion of Long-Term Debt + Total Stockholders Equity - Cash
=9672.613 + 2106.538 + 4508.838 - 2967.504
=13320.485

Invested Capital(Q: Dec. 2018 )
=Book Value of Debt + Book Value of Equity - Cash
=Long-Term Debt & Capital Lease Obligation + Current Portion of Long-Term Debt + Total Stockholders Equity - Cash
=9403.672 + 2567.699 + 4923.243 - 3685.618
=13208.996

Note: The Operating Income data used here is four times the quarterly (Dec. 2018) operating income data.

2. Joel Greenblatt's definition of Return on Capital:

Tesla Inc's annualized ROC (Joel Greenblatt) % for the quarter that ended in Dec. 2018 is calculated as:

ROC (Joel Greenblatt's)(Q: Dec. 2018 )
=EBIT/Average of (Net fixed Assets + Net Working Capital)
=EBIT/Average of (Property, Plant and Equipment+Net Working Capital)
     Q: Sep. 2018  Q: Dec. 2018
=EBIT/( ( (Property, Plant and Equipment + Net Working Capital) + (Property, Plant and Equipment + Net Working Capital) )/2 )
=1626.716/( ( (19733.969 + max(-2715.799, 0)) + (19691.231 + max(-2803.747, 0)) )/2 )
=1626.716/( ( 19733.969 + 19691.231 )/2 )
=1626.716/19712.6
=8.25 %

where Working Capital is:

Working Capital(Q: Sep. 2018 )
=(Accounts Receivable + Total Inventories + Other Current Assets) - (Accounts Payable & Accrued Expense + Defer. Rev. + Other Current Liabilities)
=(1155.001 + 3314.127 + 483.859) - (5587.079 + 1476.758 + 604.949)
=-2715.799

Working Capital(Q: Dec. 2018 )
=(Accounts Receivable + Total Inventories + Other Current Assets) - (Accounts Payable & Accrued Expense + Defer. Rev. + Other Current Liabilities)
=(949.022 + 3113.446 + 558.222) - (5498.704 + 1422.893 + 502.84)
=-2803.747

When net working capital is negative, 0 is used.

Note: The EBIT data used here is four times the quarterly (Dec. 2018) EBIT data.

3. Operating Income is also linked to Operating Margin:

Tesla Inc's Operating Margin % for the quarter that ended in Dec. 2018 is calculated as:

Operating Margin %=Operating Income (Q: Dec. 2018 )/Revenue (Q: Dec. 2018 )
=419.151/7225.873
=5.80 %

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

4. Please click Growth Rate Calculation Example (GuruFocus) to see how GuruFocus calculates Wal-Mart Stores Inc (WMT)'s revenue growth rate. You can apply the same method to get the operating income growth rate using operating income per share data.

Be Aware

Compared with a company's EBITDA margin, Operating Margin can be manipulated by adjusting the rate of depreciation, depletion and amortization (DDA).

If a company is facing competition, its Operating Margin may decline. Often the Operating Margin declines well before the company's revenue or even profit decline. Therefore, Operating Margin is a very important indicator of whether the company is facing problems.

For instance, by 2012, Nokia (NOK)'s problems were well known and its stock had lost more than 90% of its market value since 2007. But Nokia's Operating Margin had already been in decline since 2002, although its earnings per share were still rising. Investors who paid attention to Operating Margin would have avoided this huge loss. The same can be said for Research-in-Motion (RIMM).

Therefore, Operating Margin is a very important screening filter for GuruFocus. GuruFocus's Buffett-Munger screener requires that the profit margin is either consistent or expanding. The Model Portfolio of the Buffett-Munger screener has outperformed the market every year since inception in 2009.

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