Shares of electric car-makers Tesla rose 20 percent late on Wednesday, after investors were pleasantly surprised in the company’s quarterly earnings report. Major projects delivered ahead of schedule also contributed significantly to the company’s positive financial results.
Tesla said it earned $143 million in the third quarter, or about 80 cents per share. However, it remains down from the same quarter of last year at $311 million, or $1.82 per share. In terms of adjusted earnings, Tesla made $342 million, or $1.91 per share, compared with a revised profit of 3.02 per share last year. Public revenues fell to $6.30 billion from $6.82 billion last year.
Analysts expect the stock to lose 46 cents on sales of $6.43 billion in the fourth quarter.
The results for the current quarter were better than expected but Tesla has gone through this before. The question remains about the continuity of these figures. In a letter to shareholders, the company said that both the Gigafactory plant and its new Y model will be released ahead of schedule. The Y model is expected to be released in the summer of 2020, and Tesla said the Shanghai plant is ready for production and trial production of the Model 3 has already begun.
But investors appear ready for a drop in sales despite higher deliveries, mostly due to a combination of deliveries that have largely deviated from the Tesla’s cheapest car. Analysts called on Tesla to anticipate possible temporary exceptions to the production and release of new products. ” Continuous volume growth, capacity expansion, and cash generation remain the main focus,” Tesla said.
Tesla delivered 97,000 cars in the third month, with 79,600 sedans. The company delivered 84 thousand cars from the same period last year, including 56 thousand cars for the third model. Tesla said it was confident of selling 360,000 cars in 2019, meaning it had to sell 105,000 cars in the fourth quarter. The company previously said it would follow between 360,000 and 400,000 cars this year.
In the early hours of Wednesday, Ford Motor Co. also reported a third-quarter earnings report that was higher than Wall Street’s forecast. But it lowered its forecast in the fourth quarter due to lower volumes in China and higher sales incentives.
Tesla shares have lost about 23 percent this year, and 13 percent in the last 12 months. That contrasted with gains of 20 percent and 15 percent for the S&P 500 and the Dow Jones Industrial Average respectively this year.