Investor's Corner

Tesla crushes Q3 2019 results and returns to profitability

Tesla’s (NASDAQ:TSLA) third-quarter earnings for 2019 saw the electric car maker post $6.3 billion in revenue, meeting Wall Street estimates. The results, which were discussed at length in an Update Letter, were released after the closing bell on Wednesday, October 23.

The following are the key points in Tesla’s Q3 Update Letter.

EARNINGS

Tesla shareholders saw earnings per share of $1.91. In contrast, analysts polled by FactSet expected Tesla to report an adjusted quarterly loss of $0.46 a share for Q3 2019. Estimize, a crowdsourced platform that aggregates estimates from analysts, executives, fund managers, and academics, expected Tesla to report an adjusted loss of $0.29 per share.

REVENUE

Tesla reported revenue of $6.3 billion for the third quarter. Analysts polled by FactSet expected Tesla to report sales of $6.45 billion in the third quarter, while Estimize placed Tesla at a slightly more optimistic $6.60 billion.

RELATED: Top 5 things Tesla (TSLA) investors want to know from the Q3 2019 earnings call

Overall, Tesla’s results are a pleasant surprise for supporters of the electric car maker. Even CEO Elon Musk, after all, proved tempered with his expectations for the third quarter, stating during the second-quarter earnings call that he expects a small loss in Q3 2019. The company’s vehicle delivery figures in Q3 did not help this case, as the company was unable to meet Elon Musk’s internal goal of delivering 100,000 electric cars in the third quarter, delivering around 97,000 vehicles during the quarter.

TESLA MODEL Y PRODUCTION

Apart from its encouraging financials, Tesla also shared a number of optimistic updates for its vehicles and its budding Energy business. The Model Y, a crossover SUV that is expected to be even more popular than the widely-successful Tesla Model 3, has had its estimated deliveries move up to Summer 2020. During the vehicle’s unveiling, Musk proved conservative, giving an estimate of Fall 2020 (about a year from now) for the Model Y to begin customer deliveries.

GIGAFACTORY 3 PROGRESS

Tesla has also confirmed reports from China that Gigafactory 3 is progressing ahead of schedule. Previous reports from local media outlets have already hinted at this in recent months, and Tesla’s validation of these reports proved enough to shift the narrative back into the electric car maker’s favor.

“We are already producing full vehicles on a trial basis, from body, to paint and to general assembly, at Gigafactory Shanghai. We have cleared initial milestones toward our manufacturing license and are working towards finalizing the license and meeting other governmental requirements before we begin ramping production and delivery of vehicles from Shanghai,” Tesla stated.

TESLA SOLAR

Tesla’s Energy business also showed some growth in the third quarter. Long dormant and tempered compared to the company’s electric vehicle business, Tesla Energy has long been considered by skeptics as a neglected project. This has changed in the third quarter, with Tesla Solar installs moving up 48% compared to Q2 2019’s figures. These installations are further bolstered by new initiatives relating to the company’s energy business, such as the introduction of the Megapack, a massive 3 MW battery that could prove to be as disruptive as Tesla’s electric cars.

TESLA SEMI and GIGAFACTORY EUROPE

Tesla has been quite thin on updates surrounding the Tesla Semi, having focused more on Model 3. In its Q3 Update Letter, Tesla revealed that its all-electric long-hauler is poised to begin production in late 2020. An official announcement about the location of Gigafactory 4 in Europe is also expected to be released in 2021. “We are planning to produce limited volumes of Tesla Semi in 2020 and are hoping to announce soon the location of our European Gigafactory for production in 2021,” Tesla wrote.

As of writing, Tesla stock is up 21.03% at $ 308.25 per share in Thursday’s after-hours trading.

Following is Tesla’s Q3 2019 Update Letter.

Tesla Q3’19 Update Letter by Simon Alvarez on Scribd

Tesla crushes Q3 2019 results and returns to profitability
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