Tesla reported its third-quarter earnings after the closing bell on Wednesday and surprised even themselves when the positive results came through.
The company's shares soared by 20% in after-hours trading, and Tesla made $6.3 billion net in revenue during that quarter, surprising Wall Street analysts.
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Earnings and revenue
The California-based electric vehicle company confirmed that their Q3 net profit was $143 million, allowing investors to breathe more easily, given the company had seen a loss of $1.1 billion in the first half of 2019.
The third-quarter revenues were $6.3 billion, which came below the $6.5 billion expectations, and down from $6.8 billion at the same time last year. Tesla's response to this lowered number is the higher amount of leased vehicles, saying they've tripled in the last year.
Tesla Q3 results:
- Shanghai Giga ahead of schedule— Elon Musk (@elonmusk) October 23, 2019
- Model Y ahead of schedule
- Solar installs +48% from Q2
- GAAP profitable
- Positive free cash flow
Even though numbers are a little lower than expected, Tesla is pleased with the results. The company's founder and CEO, Elon Musk, had foreseen Q3 numbers dwindling, as he stated during Q2 that he expected a loss.
The delivery of new vehicles during Q3 did not aid the company's case, as Musk had hoped to deliver 100,000 electric cars. However, the company only managed to reach 97,000 during the quarter.
Next growth phase for Tesla
Tesla, as ever, is looking toward the future. The company's 'gigafactory,' which will assemble the Model 3 cars in Shanghai, China, was built in just ten months and cost 65% less than if it had been built in the U.S.
EARNINGS: Tesla shares surge more than 11% after posting third-quarter resultshttps://t.co/P1sqPlbt1opic.twitter.com/SViYDuFKp1— CNBC Now (@CNBCnow) October 23, 2019
Tesla said: "Continued volume growth and cost control are an important combination for achieving sustained, industry-leading profitability."
The company has also been working on its new electric heavy-duty truck, the Tesla Semi, beginning production early next year.
Furthermore, another 'gigafactory' is set to be built in Europe in 2021.
Tesla surprises with a profit in the third quarter https://t.co/4KQhTfo6we by @kirstenkorosecpic.twitter.com/p4PtN8qn6l— TechCrunch (@TechCrunch) October 23, 2019
The company is still aiming to deliver its promised 300,000 to 400,000 cars this year. However, investors remain skeptical on this point.
Tesla is clearly still doing well, and we're curious to see how the company will do in the final quarter of the year.