No doubt Tesla Motors (TSLA +2.40%) stock got quite a charge after announcing the company's first-ever profit – a 24% jump between market close on Wednesday and market close on Thursday, and by Friday morning it leapt a further 13%.
I can imagine the Tesla team in the boardroom spraying champagne over themselves at the investors' buying frenzy. And I can see them thumbing their noses at the nay-saying short sellers.
But I have been staring at Tesla's income statement and I just cannot make the company's proclaiming a profit of $15 million coincide with my own concept of fiscal reality.
First off, the income statement shows an operating loss of $5.6 million dollars. After adding back in "other income" of $17.1 million and accounting for interest earned, interest paid, and provision for income tax, we get a net profit of $11.2 million.
There is nothing on the income statement showing a profit of $15 million.
Not only that, but the "other income" item includes $10.7 million from the one-time elimination of the Department of Energy's common stock warrant liability. Take that away and we're left with a profit of $0.5 million.
Then take away the "$6.4 million of favorable foreign currency exchange impact" and there is a loss of $5.9 million.
The company itself says that, using GAAP rules, net profit per share is $0.00.
And, as my father used to say, twice zero is still zero.
