Tesla defies market slump to post strong profit gain
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Tesla charged through a summertime auto industry sales slump in the US to post stronger-than-expected net earnings for the third quarter.
The electric car and solar panel maker said on Wednesday that it made US$331 million, or US$0.27 per share, for its fifth-straight profitable quarter.
Excluding special items such as stock-based compensation, Tesla made US$0.76 per share, beating Wall Street estimates of US$0.57. Revenue from July through September was US$8.77 billion, a record that passed analysts’ expectations of US$6.3 billion. But as in previous quarters, the company relied heavily on US$397 million it earned from selling electric vehicle credits to other automakers so they can meet government fuel economy and pollution regulations.
The earnings were driven by a 44 percent increase in global deliveries for the quarter, which came as US auto sales overall fell 9.7 percent from a year ago due to consumer fears about the economy hit hard by the pandemic.
Tesla shares rose 3 percent in extended trading on Wednesday. Its results were released just after the markets closed. Tesla’s shares are worth about five times what they were at the start the year, accounting for a split.
The third-quarter profit was more than double the same period a year ago, when Tesla made US$143 million. Its string of profitable quarters reversed years of losses. Through the first nine months of this year, Tesla has made US$451 million and appears headed toward its first annual profit.
Jessica Caldwell, executive director of insights for the Edmunds.com auto website, said the company’s results and production show it has moved out of rookie territory and may become a mainstream automaker this decade.
But she said the release on Tuesday of an all-electric GMC Hummer shows that Tesla is facing competition from multiple auto companies.
“With more EV launches on the horizon, Tesla has a big red target on its back,” she said.
On October 2, Tesla reported that it had delivered 139,000 SUVs and sedans from July through September, compared with 97,000 during the same period a year ago.
Analysts said China, where the economy is recovering, was a major source of sales for Tesla.
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