Tesla CEO Elon Musk after a SpaceX Falcon 9 rocket test flight in Cape Canaveral, Florida on January … [+]
Tesla’s wild ride continues as Elon Musk’s electric vehicle company stayed profitable for a second-consecutive quarter buoyed by sales of Model 3 sedans and said 2019 was a turning point for a company that’s yet to post an annual profit. The results pushed its shares higher on the heels of an eye-popping run that began in October.
The Silicon Valley-based carmaker reported net income for the quarter of $105 million on revenue of $7.38 billion. Adjusted EPS was $2.14, topping consensus expectations of $1.72.
The company was expected to report revenue of $7.02 billion, according to a Reuters survey of equity analysts. Once again, it also got a lift from sales of zero-emission and other regulatory credits to other automakers in the quarter, booking $133 million of the free money.
Shares of Tesla spiked following the results announcement, rising 6.7% to about $620 in after-hours Nasdaq trading. Tesla has more than doubled since a surprise third-quarter profit announcement on Oct. 23.
Last year “was a turning point for Tesla,” Musk said in a letter to investors. “We demonstrated strong organic demand for Model 3, returned to GAAP profitability in 2H19 and generated $1.1B of free cash flow for the year. We achieved strong cash generation through persistent cost control across the business.”
Tesla also said production of its Model Y crossover began this month at its Fremont, California, plant, earlier than initially scheduled, and its Shanghai plant, which opened in record time in January, is running “as expected.” the company said without elaborating. Preparations for the company’s third assembly plant, to be built near Berlin, are moving forward and Tesla thinks initial deliveries from it could happen by 2021.
That remains to be seen, owing to local German opposition to Tesla’s plans to cut down a portion of existing forest and concerns about how much water the plant will use.
“Tesla got a bit lucky in that the market evolved around them: unplanned, the Model Y might slide right in the sweet spot for the EV crossover market,” said Jessica Caldwell, executive director of industry insights at Edmunds. “It has a more prestigious brand than the mainstream hybrid nameplates but comes at a significantly less cost than the rest of the luxury competition.”
The stock surge has also dramatically increased Musk’s wealth. Forbes estimates the South African-born entrepreneur’s net worth at $32.3 billion.
(Updates to follow)
