(Bloomberg) -- Tesla Inc. posted only its third quarterly profit ever and generated more cash than expected, bolstering Elon Musk's bid to make selling electric cars a financially sustainable business.
- Adjusted net income was $2.90 a share, soundly beating analysts' average estimate for a small loss, as the Model 3 quickly became one of the top-selling sedans in the U.S. once the company managed to resolve a series of production bottlenecks.
Key Insights
- Free cash flow was about $881 million, a turnabout from the billions of dollars Tesla was burning on a quarterly basis while it was struggling to ramp up the Model 3.
- Even as deliveries took off, Tesla managed to maintain more than $900 million in customer deposits, showing that there's still plenty of pent-up demand for the company's cars.
- Tesla reaffirmed its forecast for profit and positive free cash flow in the fourth quarter, adding credibility to its chief executive officer's prediction a quarter ago that the company will make those feats routine going forward.
Market Reaction
- Tesla shares surged as much as 11 percent after the close of regular trading Wednesday.
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- Tesla has eked out profits in the past in part thanks to sales of zero-emission vehicle credits to other automakers. This did did help matters last quarter, adding $52.3 million in revenue, but the company would have pulled off a profit regardless.
--With assistance from Melinda Grenier.
To contact the reporter on this story: Dana Hull in San Francisco at dhull12@bloomberg.net
To contact the editors responsible for this story: Craig Trudell at ctrudell1@bloomberg.net, Melinda Grenier
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