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Tesla Motors Inc Shares Spike as Q3 Profit Unexpectedly Surges

Wednesday, October 26, 2016 14:01
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tesla-logoTesla Motors Inc (NASDAQ:TSLA) late today posted a record quarterly profit for Q3 that caught analysts and investors off guard, sending its shares up over 5% in late trading.

The Palo Alto-based company reported third quarter adjusted EPS of $0.71 per share, which is miles better than Wall Street’s meager $0.02 estimate. Revenue rose to $2.3 billion in the latest period, in-line with Wall Street estimates.

As far as the all-important delivery count, Tesla said that final Q3 deliveries were 24,821. The company’s initial estimate was 24,500, so that’s a smallish improvement. Year-over year, vehicle deliveries jumped 114%, proof positive that the company’s recent production overhaul is paying dividends. Those cars delivered in Q3 included 16,047 Model S sedans and 8,774 Model X crossover SUVs.

The company also noted that an additional 5,065 vehicles were in transit to customers at the end of the quarter, and will count toward Q4 sales. Meanwhile, gross margins were steady at 25.0%, at the low end of the company’s guidance.

Looking ahead, the company kept its forecast unchanged: “We maintain our guidance of 50,000 new vehicle deliveries for the second half of 2016, with a Q4 plan of just over 25,000 deliveries, despite the challenges of winter weather and the holiday season.”

Tesla said it will will demonstrate the grand plans of its partnership with SolarCity at an event on October 28th. Investors have been anxious to see how the two companies’ synergies will align, and how they will actually turn a profit together.

The company commented via press release:

The Tesla third quarter results reflect strong company-wide execution in many areas. Furthermore, we expect this to continue into Q4 and project positive GAAP net income (excluding non-cash stock-based compensation) despite ZEV credit sales in Q4 likely being negligible. We set new records for vehicle production, deliveries and revenue, which led to GAAP profitability and positive free cash flow (cash flows from operations less capital expenditures). At the same time, GAAP total automotive gross margin and gross profit per car increased substantially.

Tesla shares surged $11.26 (+5.57%) to $213.50 in after-hours trading. Prior to today’s report, TSLA had fallen nearly 16% year-to-date.


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