Yahoo Autos Tesla Posts Unusual Profit as Stock Market Sinks
Tesla posted its third ever quarterly profit on Wednesday, displaying an unusually sunny outlook for the electric-car company and for investors reeling from losses in the broader stock market.
The company reported $312 million in net income for the three months ending September 30, marking its first profitable quarter in two years. Previously, Tesla reported $22 million in net income in the third quarter of 2016 and $11 million in the first quarter of 2013. The automaker has never made an annual profit since going public in June 2010. Tesla shares jumped 10 percent in after-hours trading and opened Thursday morning at $317.21, a price not reached since late August. Meanwhile, the Dow Jones Industrial Average sank to 24,583.42 on Wednesday’s close, a loss of more than 8 percent from a yearly peak earlier this month.
Tesla still would have recorded a profit despite cashing $52 million in California zero-emission-vehicle credits in that quarter. The company’s $20 million settlement with the Securities and Exchange Commission for CEO Elon Musk’s allegedly misleading tweets-and Musk’s departure from his chairman position and separate $20 million settlement- appeared to do no immediate financial harm. According to the filing, Tesla said it was netting more than 20 percent margins on the Model 3 and hitting production rates of about 4300 cars per week. The company maintains it has more than 364,000 reservations for the Model 3 as compared to August 2017. Since then, less than 20 percent of customers have canceled, the company said. Despite struggling with delivery issues, Tesla remains adamant that home delivery is "superior from both a cost and customer satisfaction perspective."
Tesla, which released third-quarter sales early this month, sold 83,500 cars worldwide, including 55,840 Model 3 sedans, 14,470 Model S sedans, and 13,190 Model X crossovers. That third-quarter sales figure was not only its highest amount since the second quarter of 2018, but it also topped the company's annual sales for every year through 2016, when it hit 76,230 cars. In 2017, Tesla sold 101,312 cars. In the filing, Tesla claims it has "transformed" into sales of 340,000 cars per year, but for the year to date, it has only sold 153,950 cars.
With the advent of a Chinese manufacturing plant, "dozens" of new company-owned body shops, and new updates to Autopilot software that can automatically drive the car through highway interchanges, Tesla projects a profitable fourth quarter. The company also projects losing $50 million in this current quarter due to U.S. tariffs on Chinese parts.
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