Tesla shares soared by more than 12 percent in premarket trading after the company reported a surprise profit for the third quarter as CEO Elon Musk made good on his promise to start turning regular profits in the last half of the year.
The company's earnings report, released after the markets closed Wednesday, also showed better-than expected car sales and a faster timeline on its Model 3 production. The electric car maker said its midsize Model 3 sedan, which it hopes to produce on mass scale, was the best-selling car in the U.S. when measured by revenue and the fifth best-selling car in terms of volume.
Musk told analysts on a call it was an "incredibly historic quarter" for the young car company. It was welcome news for investors following an otherwise a tumultuous few months. The company's shares settled after the markets opened but were still up by about 6 percent in morning trading.
Here's how the company did compared with what Wall Street expected, based on average estimates of analysts polled by Refinitiv:
- Adjusted earnings: $2.90 a share vs. an expected loss of 19 cents per share
- Revenue: $6.82 billion vs. an expected $6.33 billion
Tesla posted net income of $311.5 million, or $1.75 per share, compared with a loss of $619.4 million, or $3.70 per share, a year ago. Revenue surged 70.5 percent from $4 billion from June and more than doubled from a year ago.
After one-time adjustments, Tesla earned $516 million during the quarter. It was Tesla's third profitable quarter and compares with an adjusted loss of $520 million during the same period last year.
Musk previously said the company would become sustainably profitable by now, having had just two profitable quarters prior to Wednesday's report since it went public in 2010. The company confirmed that it also expects to generate a profit during the fourth quarter.