PALO ALTO — Tesla Motors on Wednesday trounced expectations and reported a surprise third-quarter profit as the electric car maker set a new record for quarterly revenue and said it is on track to meet its ambitious projections for vehicle deliveries in the second half of the year.
It was only the second time in Tesla’s history that the maker of upscale cars with an impassioned fan base has delivered a quarterly profit. The results come at a crucial juncture as the company navigates a planned merger with SolarCity and deals with the fallout of fatal crashes involving its self-driving technology.
“It’s definitely one of the best moments in Tesla’s history,” said Tesla Chief Executive Elon Musk, on a conference call to discuss the company’s results. “I think we’re headed to have a great fourth quarter as well. I currently believe (the fourth quarter) will be profitable excluding stock expenses.”
Tesla said that for the period ending in September, it earned $21.9 million, or 14 cents a share, compared with a loss of $229.9 million, or $1.78 a share, in the same quarter a year ago. Excluding one-time items such as stock options, Tesla earned 71 cents a share.
Revenue rose to $2.3 billion from $936.8 million in the third quarter of 2015. The results far exceeded the estimates of analysts surveyed by Thomson Reuters, who had forecast Tesla to lose 54 cents a share on $1.98 billion in sales.
It was an impressive report for Tesla. The company said it delivered 24,821 vehicles during the quarter, surpassing an earlier estimate of 24,500 vehicles. The delivery figures included 8,774 of Tesla’s newer Model X SUVs. Tesla also said that at the end of the quarter, 5,065 of its vehicles were on their way to customers and those cars would be classified as fourth quarter deliveries.
The company reiterated that it remains on track to deliver 50,000 new vehicles in the second half of the year.
“Musk was driven to show Tesla could turn a profit this quarter, and succeeded,” said Clement Thibault, a senior analyst who covers Tesla for Investing.com. “This is very good news for the company, as it may just create a positive domino effect and ease the additional capital raising and approval of the SolarCity merger.”
In addition to running the electric car company, Musk is trying to shepherd Tesla’s planned $2.6 billion acquisition of solar panel maker SolarCity. Musk owns about 20 percent of both companies, and shareholders of Tesla and SolarCity are scheduled to vote on the proposed acquisition Nov. 17.
The deal has raised some concerns about whether Tesla can raise enough cash to continue investing in new operations and vehicles, such as the upcoming Tesla Model 3, which is set to be delivered in late 2017.
Tesla dialed down its capital-expense plans for the year Wednesday, when the company said it now expects its capital spending to reach about $1.8 billion for all of 2016, after spending $759 million in the first three quarters of the year. Tesla had earlier said it expected to spend $2.25 billion on capital expenses this year.
The profitable quarter comes as Tesla has been caught in controversy for several months over its autopilot technology and the role it may have played in fatal crashes in Florida and Germany. On Monday, Consumer Reports also gave the Tesla Model X low marks in its latest survey on automobile reliability.
“This (quarter) is definitely a step in the right direction,” said Thibault. “But the bigger questions surrounding Tesla still remain. Namely about its ability to deliver half a million quality cars yearly, in less than two years from now.” Tesla has stated that it expects to deliver at least 500,000 cars a year beginning as early as 2018.
Tesla shares rose more 5 percent to $212.05 in after-hours trading following the release of the company’s results.
