For Tesla, yet another profitable quarter

(Photo credit: Tesla)

Tesla (NASDAQ:TSLA) reported third-quarter revenue of $8.77 billion, a year-over-year increase of 39%. The total from the company came in higher than estimates of $8.26 billion. Automotive revenue was $7.6 billion.

“This was achieved mainly through substantial growth in vehicle deliveries as well as growth in other parts of the business,” the company said in the release.

Tesla reported earnings per share of 76 cents for the third quarter, which was higher than the consensus estimate of 56 cents.

Tesla reported  GAAP net income was $331 million in the third quarter, marking the company’s fifth consecutive quarter of net profit.

The company’s operating margin was 9.2%, up from 4.1% in the same quarter last year.

Tesla remains on track to produce and deliver its goal of 500,000 vehicles in the current fiscal year.

“We are increasingly focused on our next phase of growth,” the company said. “Our most recent capacity expansion investments are now stabilizing with Model 3 in Shanghai achieving its designed production rate and Model Y in Fremont expected to reach capacity-level production soon.”

The average selling price declined slightly in the third quarter as consumers shifted to the more affordable Model 3 and Model Y.

The energy business was a positive with Powerwall demand remaining strong and growing. Many solar business customers are including a Powerwall with installation according to the company. 

“We continue to believe that the energy business will ultimately be as large as our vehicle business.”

That division saw quarterly revenue of over $1.1 billion in the third quarter. The company brought $397 million in regulatory credits, almost double the amount earned during the same period last year..

Solar deployments more than doubled quarter-over-quarter to 57 MW. Solar roof installations almost tripled sequentially. The company recently demonstrated a 1.5-day solar roof install.

The profitability of the company remains a key for possible inclusion in the S&P 500. The high stock-based compensation came from the 2018 compensation plan for CEO Elon Musk. Tesla said $290 million was triggered under that plan due to the company’s high market capitalization and probable operational metric milestones.

Shares of Tesla closed Wednesday at $422.57. In after-hours trading, shares of Tesla are up 3% to $434.02.

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