1/ Just cooked up so fresh FUD for the $BA.D Boys (cc: @PlugInFUD)

In Q3, revenue from Boeing's Defense, Space & Security segment came in at $6.8B, down 2% from the same period in 2019. Earnings from segment operations fared even worse, falling 17% year-over-year to $628M. $BA
2/ During the first 9 months of 2020, Boeing's defense segment brought in revenues of $19.5B, down a fairly modest 3% yoy. The bottom line took a far more substantial hit, however, falling 60% yoy to $1.0B.

3.1/ Pegasus Program Proves Problematic

The KC-46 Pegasus, a next-gen @usairforce tanker, was meant to be an easy win for Boeing. But long development delays have weighed on the program, causing growing frustration among the top brass.

3.2/ As a fixed-price development contract, Boeing is required to shoulder the burden of cost overruns on the KC-46. It booked a $67M charge in Q3, adding to the $4.7B of its own money its already spent on the KC-46. $BA $BA.D
4.1/ Starliner's Struggles Sour Supporters

Starliner, Boeing's manned spacecraft, has also suffered a series of embarrassing setbacks. A failed test flight last year led to an investigation, which identified "fundamental" software issues, forcing $BA to book a $410M charge.
4.2/ While Boeing has long been able to rely on the support of powerful allies on Capitol Hill, recent space contract decisions suggest that at least some government decision-makers have lost patience with the venerable aerospace giant.

4.3/ In March, Boeing was beaten by upstart rival SpaceX for the Lunar Gateway supply contract, a program worth up to $7B over 15 years. A month later, it again fell short, failing to secure even a piece of NASA's 10-month, $967M lunar lander development contract.

5/ The troubles facing Boeing's Defense, Space & Security segment have multiplied over the past year. A number of critical development programs have faced painful delays and cost overruns, turning potential cash cows into financial burdens.


6/ Unless Boeing can change course and get its government programs back on track, it may end up alienating its friends & allies in government, which could threaten its ability to win lucrative federal contracts going forward.


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More from @AlmingtonCap

19 Nov
1/ My latest for @gurufocus, 'Tesla: The High Price of S&P 500 Inclusion', just went live.

"A closer review of what Tesla had to do to gain admission to the S&P 500 should give thoughtful investors reason for pause."

2/ When Tesla reported its 4th consecutive quarterly profit in July, many investors saw index inclusion as inevitable, an expectation that caused the stock to climb over the summer. However, the S&P 500 Committee opted to punt in September.

3/ Despite the September snub, Tesla's index inclusion hopes were far from dead. Indeed, after reporting a fifth consecutive quarterly profit in October, hopes of S&P 500 inclusion reached new heights. These hopes were vindicated on Nov. 16.


Read 14 tweets
5 May
Elon Musk's "genius engineer" mystique would not be possible if it weren't for the uncritical reporting of fawning "science & technology" journalists. Let's discuss how this works using the example below. $TSLA $TSLAQ

cc: @TESLAcharts for your list of aiders & abettors.

Elon has argued publicly that a single giant solar plant in Utah could power the entire United States. For example, he made this claim in a December 2015 speech at the Sorbonne. $TSLA $TSLAQ

This idea is laughable to anyone with high school-level of physics knowledge. It's a matter of wire resistance, which will is a limiting factor on power transmission, regardless of where the power is sourced (coal, solar, dreams, etc.) $TSLA $TSLAQ

Read 12 tweets
30 Oct 19
1) The slight rebound in solar deployments in Q3 does not appear to represent a meaningful reversal of the multi-year downtrend. Investors banking on Tesla being “more than just a car company” should think again. $TSLA $TSLAQ

2) Tesla’s solar deployments have been in near-freefall since 2016. Deployments declined from their all-time high of 253 megawatts in Q4 2015 to a low of 29 megawatts in Q2 2019 (thanks to @TESLAcharts for his ever-excellent visualizations) $TSLA $TSLAQ
3) Even with the 48% Q3 upswing, deployments were still less than 17% of the all-time high and barely more than half of the quarterly average set in 2018. Tesla has fallen to third place among solar installers (and is falling further behind). $TSLA $TSLAQ

Read 12 tweets
16 Oct 19
1) Thread on 3Q19 earnings: The $TSLA long thesis assumes that it will not only soon become profitable (necessarily ignoring all material evidence showing this is false), but also that it is somehow immune to auto market cyclicality. We call BS. $TSLAQ

2) Auto manufacturing is a cyclical industry. That's just a fact. Yet, even when producing at full capacity in a robust consumer market, $TSLA has proven only fleetingly profitable – and even then it took a host of one-off gimmicks to do it in 2H18. $TSLAQ
3) 2H18 profit came thanks to a lot of financial engineering, a focus on high-ASP variants, stiffing suppliers, etc. They could only do that once. As we opined at the time, 3Q18 was as good as it would ever get for Tesla. $TSLA $TSLAQ
Read 17 tweets
6 May 19
1/ Thread on our recent note on the @WeWork IPO:

TL;DR - VC has bid WeWork's valuation to ridiculous levels, but public markets won't be nearly so generous. Its bloated valuation will soon be on the butcher’s block. This short will be fun.

Full note: gurufocus.com/news/870303
2/@WeWork's cash burn is insane, getting worse every year. A $1.9B net loss in 2018 set a new embarrassing record.

And the losses are not likely to end soon, if ever. Bernstein analysts estimate it will need $19.7B in financing through 2026.

3/ The premise underpinning @WeWork's business model is that it can "make it up on volume". The Silicon Valley notion that physical businesses can scale just like software startups has proven contagious. But it is nothing but a fantasy.
Read 8 tweets
17 Apr 19
1/ Thread on Starlink, @SpaceX's proposed satellite constellation. This is the program that's eventually supposed to pay all the bills and fund its Mars mission. Yet, according to Gwynne Shotwell, it might not happen at all. $TSLA $TSLAQ

Our full article:
2/ While it costs nothing to dream about a future manned Mars mission, actually undertaking one will. According to the National Research Council, a manned Mars mission would carry a hefty $220 billion price-tag. $TSLA $TSLAQ #SpaceX
3/ SpaceX remains unprofitable & it knows that launching satellites for government & commercial customers can neither provide the cash necessary to fund its ambition of space exploration, nor justify its eye-watering $30 billion valuation. $TSLA $TSLAQ
Read 9 tweets

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