Tesla motors delivered on Elon Musk’s promise to turn a profit in the 3rd quarter this year by boosting production of the Model 3. And after a rocky start, everything did work out for the electric car company.
Tesla showed earnings of $311.5 million during the three months ending in September, swinging from a loss of $619 million at the same time last year. This is only the third time in the company’s eight-year history as a public company that it has posted a quarterly profit.
Tesla stock prices started an upward swing Tuesday, gaining 13 percent. Before the closing bell, the momentum was maintained, according to Money Maker, but with no clear indication of direction going forward.
Revenues more than doubled from last year to $6.8 billion to easily top analyst estimates. This compared with 2nd quarter figures of a net loss of $718 million from $4.0 billion revenue. As for cash flow, Tesla came out smelling like a rose. Free cash flow for the 3rd quarter was an impressive $881 million and operating cash flow $1.4 billion.
In a conference call with analysts late Wednesday, Elon Musk predicted Tesla would continue to be profitable from this point forward, reports CTV News Canada.
“This quarter was an important step toward that,” Musk said after getting choked up talking about the support that Tesla’s customers have shown the company. “I am incredibly excited about what lies ahead.”
Massive thanks to Tesla owners & supporters. We wouldn’t be here without you.
— Elon Musk (@elonmusk) October 25, 2018
In his conference call, Musk brushed aside questions about what attributes the company was looking for in its next chairman who is supposed to be appointed by mid-November in accordance with the SEC settlement. Musk squashed any further questions on that issue by saying he would only accept questions about Tesla’s operations.
Musk was a bit reserved during the conference call, and his usual boasting style was absent most of the time. He did break out with a bit of bragging when he said, “I think we may have the most exciting product roadmap of any company on earth, by far.”
The best outcome for Tesla was not just being able to turn a profit in the 3rd quarter, but the company has stopped burning through its cash. This is a huge relief to investors, but there will still be some skeptics going forward. We will just have to wait and see how this next quarter pans out.
As of 9:58 on October 25, Tesla shares are up 9.38 percent at $315.56.
