Published: Sun, October 28, 2018
Markets | By Jeffery Armstrong

Tesla shares rise after posting ‘historic’ Q3 profit

Tesla shares rise after posting ‘historic’ Q3 profit

The aim is to shift up to a million cars a year outside the US. Tesla also says that it has chopped the amount of time it needs to manufacture a Model 3 by almost a third.

Tesla CEO Elon Musk announced his company's plans to join the self driving vehicle market after a better-than-expected Q3 earnings report.

Speaking to analysts following the company's Q3 earnings release, CEO Elon Musk said he has already approved the final prototype for the all-electric crossover. "I am incredibly excited about what lies ahead".

Tesla finally posts a profit

CNBC added that Tesla's share price had risen by 12% following publication of its financial results. Tesla agreed to pay $20 million as part of that settlement, and Musk said he would step down as chairman of the board; he can stay on as CEO.

Musk acknowledged in April that Tesla had attempted to automate too many production tasks at the Fremont factory and would use more human workers in the assembly process.

"Tesla flexed is model leverage muscles in [Q3], exhibiting a dramatic swing from negative to positive on a number of key metrics", according to Nomura.

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Musk seemed to express frustration about The Journal's story via Twitter Friday afternoon, replying to a Twitter user who suggested the story was motivated by a desire to lower Tesla's stock price. The Company reported an adjusted earnings per share of Dollars 2.90, increasing from a loss of USD 2.92 per share previous year and smashing analysts' estimates of an earnings per share loss of 19 cents.

Bloomberg News first reported in August that the U.S. Securities and Exchange Commission was scrutinizing Tesla's public pronouncements on manufacturing goals and sales targets. Investors have been calling on Ford to detail a promised $11 billion worth of cuts that were promised during the next five years as the company tries to right-size itself to better compete globally.

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

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Some analysts, however, believe Musk may be driving profits by selling only high-end, high-margin Model 3s and those profits may not be sustainable. One of those instances looms during next year's January-March period. The move was capped off by Tesla's earnings results, where the company posted record profit and free-cash flow. There seems to be enough room here, but the company needs money and time to put together the tools and the infrastructure needed to support vehicle production and assembly. It's not unusual for companies to face investor lawsuits if they make promises about products that don't come true, whether the statements refer to a predicted launch timeline or the overall performance of the hardware itself.

However, after managing to just achieve self-imposed delivery and financial targets, the third quarter profit, coming before the end of the year is a real positive step for the electric auto maker that's working to increase demand for smarter and more energy efficient vehicles.

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