Tesla holds share gains after surprise third quarter profit
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Shares in electric car firm Tesla were up more than 16 per cent today after chief executive Elon Musk delivered his promise that the company would return to profitability in the third quarter.
The company’s shares surged 18 per cent in after hours trading last night after the car maker beat analyst expectations and posted a profit of $1.86 per share, up from a loss of $1.12 per share in the previous quarter.
Read more: Investors pile into Tesla after topping profit expectations
Analysts had expected a loss of 42 cents per share, according to Refinitiv.
In the second quarter Tesla reported a loss of $1.12 per share.
Investors were also buoyed by the announcement that the firm’s Model Y is ahead of schedule to launch next summer and the opening of Tesla’s new plant in Shanghai.
Shareholders have previously been frustrated by the firm’s failure to meet financial and production targets, and shares are still down more than a third from their 2018 peak.
Tesla reported revenue of $6.30bn in the three months to the end of September, missing estimates of $6.33bn, and down on $6.35bn in the previous quarter.
CMC Markets analyst David Madden said: “Not only were the numbers good, the group confirmed it is ahead of schedule for the Model Y as well as the new plant in Shanghai. The group has had its fair share of setbacks over the years, but now it seems to be moving up a gear”.
Read more: Tesla: Nice cars, shame about the bottom line?
Naeem Aslam, chief market analyst at Thinkmarkets, added: “The overall take away from Tesla’s earnings is that the company is getting its cost structure in shape, its landscape has matured and perhaps the mammoth spending phase may be on the pause if not over.”
Main image credit: Getty