Tesla reports third-quarter profit, fulfilling pledge from its CEO
SAN FRANCISCO — Tesla Motors delivered on CEO Elon Musk’s promise to make money during its latest quarter after fulfilling his pledge to boost production of its first electric car designed for the mass market.
The company earned $311.5 million during the three months ending in September, swinging from a loss of $619 million at the same time last year. It’s only the third time that has posted a quarterly profit in its eightyear history as a public company and the first time in two years.
A big jump in Tesla’s output of its mass-market Model 3 car powered the breakthrough. The manufacturing increase and moneymaking quarter are two things Musk promised would happen in early August.
Revenue more than doubled from last year to $6.8 billion to easily top analyst estimates, just as the profit did.
Tesla’s stock soared 13 percent to $326.12 after the numbers came out.
The third-quarter performance should help restore some of the credibility Musk lost after he followed up the bold performance with a startling tweet informing the world that he had secured financing to pull off a buyout of Tesla.
Musk later abandoned his plan, and the Securities and Exchange Commission subsequently filed a lawsuit alleging he had misled investors because he was never close to lining up the estimated $25 billion to $50 billion it would have taken to pull of the deal he envisioned.
After initially denying the SEC’S accusations, Musk and Tesla agreed to pay a combined $40 million fine to resolve the case without acknowledging or denying wrongdoing.
Musk also must step down as Tesla’s chairman for at least three years as part of the settlement, though he can remain as CEO of the company that has become synonymous with him.
Making money is something Tesla needs to do to stay afloat, because it has taken on more than $10 billion in debt as Musk has pursued his ambition to create a viable automaker that makes cars running on something besides gasoline. About $1.3 billion of that debt will come due by March, intensifying the pressure on Musk to stop the steady losses.