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Tesla Motors CEO Elon Musk
Tesla's third quarter earnings beat analyst expectations by a wide margin, as the company earned 71 cents a share on an adjusted basis on $2.3 billion in revenues.
Analysts expected a loss of 54 cents per share on $1.98 billion in revenues, according to a Thomson Reuters consensus estimate.
Word that this was Tesla's second profitable quarter ever sent shares soaring in after hours trading.
Tesla cited new product launches, increased store efficiency, and new store openings as some of the major factors driving third quarter results.
Combined net orders in the third quarter for the Model S and Model X grew 68 percent from the same period a year ago. Meanwhile the company hit record production levels of 25,185 vehicles, or a gain of 37 percent from the second quarter, and an increase of 92 percent from the third quarter.
Still, the Model S, which was launched more than four years ago, continues to grab market share. In the U.S., which is Tesla's most mature market, Model S deliveries grew nearly 60 percent year over year, the company said. That rate helped push it to a 32 percent share of the top 12 selling large luxury sedans, and "significantly outpaced" the U.S. large luxury sedan category's sales growth, it said.
The earnings come weeks after Tesla announced record delivery and production numbers, beating out second quarter delivery and production numbers by 70 percent and 37 percent, respectively.
Tesla reiterated its forecast for 50,000 new vehicle deliveries for the second half of 2016, with a fourth-quarter plan of just over 25,000 deliveries.
The company also said it was on track to meet is goal of improving automotive gross margins by 2 to 3 percentage points on a GAAP and non-GAAP basis by the end of the year. (Non-GAAP automotive gross margins exclude ZEV credits and SBC.)
Tesla said it expects its capital expenditures this year will be about $1.8 billion as it continues to focus on capital efficiency. Capital expenditures for the past three quarters totaled $759 million, the company said.
Construction on the company's Gigafactory and Model 3 development are still on schedule to support volume Model 3 production and deliveries in the latter half of 2017.
The results sent a positive tone as Tesla readies for a shareholder vote over its planned acquisition of SolarCity on Nov. 17. The company plans to announce new financing information about the deal on Nov. 1.
On Friday, Tesla is expected to reveal a solar roof product it is developing with SolarCity,
Read the full shareholder letter here.
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