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Tesla Investors Celebrate: Musk Kept Profitability Promise in Q3


Nov. 20 2020, Updated 4:27 p.m. ET

Tesla’s Q3 2018 earnings

Tesla (TSLA) released its third quarter of 2018 results after the market closed on October 24. It surprised everyone with adjusted EPS of $2.90. Analysts were expecting an adjusted net loss of $0.19 per share.

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Proving Wall Street wrong

By turning profitable, Tesla and its CEO Elon Musk proved analysts wrong who were not expecting the company to turn profitable in the third quarter. During Tesla’s second-quarter earnings call, Musk noted, “And from an operating plant standpoint, from Q3 onwards, I really want to emphasize our goal is to be profitable and cash-flow positive for every quarter, going forward.”

The company’s adjusted net EPS for the quarter was $1.75 on a GAAP basis. That was better than -$4.22 in the second quarter, the biggest GAAP quarterly loss Tesla has reported so far. In the third quarter of 2017, Tesla reported GAAP EPS of -$3.70.

On October 24, before Tesla announced its third-quarter results, the stock settled with 1.9% losses at $288.50. However, the stock rose 9.5% in after-hours trading, rising to $316.

Tesla stock has risen 9% MTD (month-to-date). That was much better than the S&P 500 benchmark’s 8.8% MTD loss.

Mainstream automakers (XLY) General Motors (GM), Ford (F), and Fiat Chrysler (FCAU) have fallen 9.2%, 11.6%, and 13% MTD, respectively.

In this series, we’ll take a close look at Tesla’s third-quarter results, including its revenues and gross margin. We’ll find out what factors drove its third-quarter results and helped it turn profitable.

Let’s start by looking at Tesla’s third-quarter revenue.


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