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Tesla Delivers Quarterly Profit

Tesla Delivers Quarterly Profit

Enterprise & IT Oct 25,2018 0

Tesla Inc reported a net profit, positive cash flow and wider margins for the latest quarter on Wednesday, delivering on Chief Executive Elon Musk's promise to turn the electric carmaker profitable.

Tesla said it expected to repeat its net profit in the current quarter.

"We can actually be cash flow positive and profitable in all quarters going forward," Tesla CEO Elon Musk said, qualifying that he excluded those in which a big debt payment comes due, such as the first quarter of 2019.

Musk reiterated that Tesla currently does not plan to raise equity or debt.

Tesla said it would begin taking orders in Europe and China for the Model 3 before the end of 2018. Deliveries would begin to Europe in late February or March, and those to China in the second quarter, if not before, Musk said. The new Model 3 will be also available in Australia and the UK around the middle of next year.

Musk said he planned to begin local production in China next year in a 'capital efficient manner,' suggesting the company might use a similar tent structure for car assembly that has already been used at its Fremont, California, plant.

Meanwhile, seeking to quell speculation that a large number of prospective buyers had canceled their reservations due to delays receiving their cars, Tesla said only 20 percent of North American reservation-holders had canceled their bookings.

Free cash flow at $881 million was positive for only the third time in Tesla's history and was helped by a surge of new production of the Model 3, lower capital expenditures, and more efficient use of working capital.

While still below the production target it set for June of 5,000 Model 3s per week, the roughly 4,300 Model 3s the company is now averaging per week were enough to boost results.

Tesla said earlier this month it built 53,239 Model 3 sedans in the quarter, in line with its target of 50,000 to 55,000 vehicles, and delivered 56,065 of the cars to customers.

More sales of the higher-priced versions of the Model 3 currently on offer helped margins which rose to over 20 percent in the quarter, Tesla said, above its projection of 15 percent margins. Lower labor hours per vehicle helped, as did lower material costs.

Total revenue more than doubled to $6.82 billion.

Tesla ended the quarter with $3.5 billion in cash after spending $510.3 million in quarterly capital expenses. It said cash would remain at least unchanged in the fourth quarter, despite a repayment of $230 million in convertible notes coming due.

Tesla reported a profit of $311.5 million, or $1.75 per share, for the third quarter ended Sept. 30, compared with a loss of $619.4 million, or $3.70 per share, a year earlier.

Excluding items, Tesla's earnings were $2.90 per share.

Tags: tesla
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