Tesla unexpectedly reports second-ever quarterly profit

Tesla unexpectedly reports second-ever quarterly profit

Tesla Motors Inc. reported a surprise profit, its first in eight quarters, just weeks after Chief Executive Officer Elon Musk urged employees to cut costs and deliver every vehicle they could to boost results and prove Wall Street skeptics wrong.

Illustrating how impressive Tesla's performance was this past quarter, Wall St. was anticipating Tesla to post a loss amid $1.9 billion in revenue for the quarter.

During the third-quarter, Tesla reported deliveries of 24,821 vehicles, over 300 more than the company estimated earlier this month. Tesla's GAAP net income was $22 million, which yielded $0.14 Earnings per Share (EPS).

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Market Pulse Stories are Rapid-fire, short news bursts on stocks and markets as they move. Much optimism surrounds Tesla considering the profitable third quarter and CEO Elon Musk seemed confident the company can repeat this feat in fourth quarter excluding stock compensation charges and possibly be profitable on a GAAP basis. He said that Tesla could raise capital to use as a buffer, for example.

The former General Motors (GM) vice chairman took Tesla to task in a CNBC interview Wednesday. Revenue jumped 145.3% from Q315 to $2.30 billion, above views for $1.9 billion. "Certainly what drove the upside on profit is the $139 million of those zero emission credits which is a near 100 percent profit business", said Osborne.

Tesla said it had $3.08 billion in cash and cash-equivalents as of September 30, compared with $3.25 billion at the end of the second quarter.

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For Musk, this quarter's results are about more than bragging rights. Immediately following the announcement, the company's shares rose almost 5 percent to $212.in after-hours trading.

In a letter to shareholders Musk and Tesla CFO Jason Wheeler stated, "Gigafactory construction and Model 3 development both remain on plan to support volume Model 3 production and deliveries in the second half of 2017". The automaker also posted $176 million of positive free cash flow.

Tesla will have to beat the pace of those third-quarter deliveries if it wants to make its guidance for the full year. That deal has drawn criticism as a potential distraction as Tesla spends heavily to prepare its California factory for the high-volume Model 3 auto and build out its Gigafactory battery plant in Nevada.

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