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Here's How Tesla Turned Its First Profit in Three Years
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For the first time in more than three years, Tesla Motors (TM - Free Report) posted a net profit in its latest quarter. The electric car giant reported earnings of 14 cents per share Thursday, which came in well ahead of the Zacks Consensus Estimate of a loss of 64 cents.
Tesla was able to post such a massive earnings beat for several reasons. First of all, the company recorded a record-high number of vehicle deliveries. Tesla delivered 24,821 cars in the quarter, of which 16,047 were Model S and 8,774 were Model X. Additionally, Tesla said that 5,065 vehicles were in transit to customers.
These impressive delivery numbers were also reflected in the company’s total revenues from Automotive sales, which rose to $2.15 billion from just $852.6 million a year ago. Tesla’s total quarterly revenue rose to a record $2.3 billion, which beat the Zacks Consensus Estimate of $2.13 billion and represents year-over-year growth of 144.7%.
Tesla’s impressive quarter was also boosted by its Services and Other revenues, which surged 77.8% to $149.7 million thanks due to higher sales of used vehicles and stationary storage products.
Furthermore, Tesla was able to improve its gross margin. The company’s third-quarter gross margin was 27.7%, and adjusted automotive gross margin was 25% in the quarter, up 140 basis points sequentially due to improved manufacturing efficiency and higher production.
Finally, a big factor driving Tesla’s earnings beat this quarter was its sales of clean car credits. Tesla sold $139 million worth of California zero emission vehicle credits, which other automakers can buy rather than their own electric vehicles.
Also of note is Tesla’s takeover of SolarCity , which Elon Musk said will be neutral, or a fourth-quarter cash contributor in “a small way.”
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Here's How Tesla Turned Its First Profit in Three Years
For the first time in more than three years, Tesla Motors (TM - Free Report) posted a net profit in its latest quarter. The electric car giant reported earnings of 14 cents per share Thursday, which came in well ahead of the Zacks Consensus Estimate of a loss of 64 cents.
Tesla was able to post such a massive earnings beat for several reasons. First of all, the company recorded a record-high number of vehicle deliveries. Tesla delivered 24,821 cars in the quarter, of which 16,047 were Model S and 8,774 were Model X. Additionally, Tesla said that 5,065 vehicles were in transit to customers.
These impressive delivery numbers were also reflected in the company’s total revenues from Automotive sales, which rose to $2.15 billion from just $852.6 million a year ago. Tesla’s total quarterly revenue rose to a record $2.3 billion, which beat the Zacks Consensus Estimate of $2.13 billion and represents year-over-year growth of 144.7%.
Tesla’s impressive quarter was also boosted by its Services and Other revenues, which surged 77.8% to $149.7 million thanks due to higher sales of used vehicles and stationary storage products.
Furthermore, Tesla was able to improve its gross margin. The company’s third-quarter gross margin was 27.7%, and adjusted automotive gross margin was 25% in the quarter, up 140 basis points sequentially due to improved manufacturing efficiency and higher production.
Finally, a big factor driving Tesla’s earnings beat this quarter was its sales of clean car credits. Tesla sold $139 million worth of California zero emission vehicle credits, which other automakers can buy rather than their own electric vehicles.
Also of note is Tesla’s takeover of SolarCity , which Elon Musk said will be neutral, or a fourth-quarter cash contributor in “a small way.”
Stocks that Aren't in the News. Yet.You are invited to download the full, up-to-the-minute list of 220 Zacks Rank #1 "Strong Buys" free of charge. Many of these companies are almost unheard of by the general public and just starting to get noticed by Wall Street. They have been pinpointed by the Zacks system that nearly tripled the market from 1988 through 2015 with a stellar average gain of +26% per year. See these high-potential stocks free >>