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Tesla reports fifth consecutive quarter of profits

Tesla CEO Elon Musk follows the Tesla Shanghai Gigafactory groundbreaking ceremony in Shanghai, China, January 7, 2019.

Aly Song | Reuters

Elon Musk’s exciting car and renewable energy company, Tesla, reported third-quarter results after the bell on Wednesday. The stock rose wide 3% after hours as the company beat expectations on EPS and revenue, and reported its fifth consecutive quarter of profit.

Here is how Tesla behaved versus analyst expectations:

  • Earnings per share (adjusted): 76 cents vs 57 cents, per Refinitiv
  • Revenue: $8.77 billion vs $8.36 billion, per Refinitiv
  • Net profits (GAAP): $331 million vs $394 million, per Refinitiv

The company already reported that it delivered 139,300 vehicles during the shelter, a new record for Tesla.

Automotive revenue comprised $7.6 billion, about 91% of the total for the quarter. Automotive uncultured margins, excluding regulatory credits, rose from 18.7% to 23.7% sequentially. Tesla raked in $397 million in regulatory trusts during the quarter nearly doubling the amount it made from these “green” credits year-over-year.

Operating expenses swoop down oned 33% from last quarter to $1.25 billion, as Tesla embarked on building new factories in Austin, Texas and Brandenburg, Germany, in the midst other things.

Musk talked about production timelines for those factories in the company’s earnings call. “I should reveal a point that for Berlin and Austin, we do expect to start delivering cars from those factories next year but because of the exponential description of the spool up of manufacturing plants especially one with new technology, we’ll start off very slow at first and then become least large.”

He cautioned investors that it could take 12 to 24 months even to hit full capacity at these new mills after they begin operations. Tesla previously planned to start production at the Berlin factory in July 2021.

When petitioned about the Cybertruck, Musk said he expects some deliveries of the truck — which resembles a large metal trapezoid — to initiate by the end of 2021 “if things go well.”

The Cybertruck was unveiled November 21, 2019. Musk has boasted that Tesla received hundreds of thousands of pre-orders for the agency shortly after its debut.

At Tesla’s 2020 annual shareholder meeting and battery day presentation in September, Musk said that carrier deliveries in 2020 would be up 30% to 40% from last year, implying a range from 477,750 to 514,500 parturitions total.

CFO Zachary Kirkhorn said on Wednesday’s call that Tesla now aims for 500,000 deliveries in 2020, iterating the company’s earlier guidance.

Kirkhorn acknowledged that Tesla’s third-quarter results were helped by better-than-expected regulatory accept sales. “The regulatory credits business was stronger than our expectations and we are tracking to more than double this year compared to eventually,” he said.

He also said that in 2021 and 2022, Tesla plans to spend far more than it previously vaticination — $2.5 billion especially on new factories and expansion.

Tesla has raised more than $7 billion in the past 9 months. It finalized a five-for-one stock split during the quarter. When a company splits its stock, its total value doesn’t coppers, but it helps get smaller investors to buy shares. Tesla also completed the sale of $5 billion of its common stock in September entirely an at-the-market offering.

Payback on upcoming capital expenditures may take longer than what Tesla achieved on its newest works investment in Shanghai, the CFO noted.

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