Finance

Tesla third-quarter profit quiets critics, shares surge

Tesla third-quarter profit quiets critics, shares surge

As far as revenue is concerned, Tesla during the quarter generated $6.8 billion in revenue, easily besting estimates from analysts on Wall Street. It's very likely that these two cars will be Model 3 and Model Y. After all, Musk said during the conference call with investors that the goal was to get Model 3 production up and running by the end of 2019. "We have not received a subpoena, a request for testimony, or any other formal process, and there have been no additional document requests about this from the Department of Justice for months". It has previously been reported that the Justice Department is focusing its investigation on Tesla's Model 3 production problems dating back to previous year and that a criminal securities-fraud probe relating to Tesla's statement's about the vehicles is intensifying.

Tesla has been trying to minimize spending and maximize revenue, cutting jobs and restructuring while trying to fast-track vehicle deliveries of its new Model 3 to customers, to meet a promise Musk first made in May to be cash-flow positive and profitable in the third and fourth quarters. We can expect Tesla to ramp up spending for one or more of these products in the next few months, which will create a drag on free cash flow.

Musk has been saying since May that Tesla has no strategy to raise equity or debt.

Tesla released its earnings report for the September quarter and, suffice it to say, the electric automaker has a lot to be proud of.

The sources said that in early 2017, Tesla could provide investors with false information about the volume of their production sedans.

Earlier this month, Tesla settled with the SEC over charges that it misled investors after CEO Elon Musk tweeted that he had secured funding to take Tesla private. But Tesla is starting to churn the Model 3 out in impressive quantities now, and although it's only really available in the USA and Canada at the moment that will change next year.

Tesla hopes to start production of its next model in 2020 and is also making plans for a Tesla ride-hailing service, Mr Musk added. Musk and Tesla agreed to pay a combined $40 million without acknowledging or denying wrongdoing. It is the first time Tesla has posted a quarterly profit since 2016 - and just the third time it has done so in its 15-year history.

"We achieved GAAP net income of over $300 million, increased cash and equivalents by $731 million and achieved a greater than 20% gross margin for Model 3".

Musk seemed to express frustration about The Journal's story via Twitter Friday afternoon, replying to a Twitter user who suggested the story was motivated by a desire to lower Tesla's stock price.

While the third-quarter results were definitely "impressive", and spurred at least one upgrade to outperform at Wolfe Research, most analysts questioned whether the profit and robust cash flow were sustainable and can be repeated next quarter.


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