Tesla Inc on Wednesday posted a surprising profit of US$143 million in its latest quarter, raising hopes the electric vehicle company might be turning the corner after posting mostly losses during its first decade as a publicly held company.
Analysts surveyed by FactSet had projected Tesla would lose about US$253 million in the third quarter. The positive results saw Tesla’s shares soar 20 percent to US$306 in extended trading.
The performance represents a measure of vindication for Tesla cofounder and chief executive officer Elon Musk, who has been facing more questions about whether he is the right person to be steering the company at this critical juncture.
Photo: Reuters
Musk reiterated a pledge to sell at least 360,000 vehicles this year. Tesla will have to sell about 105,000 vehicles in the final three months of the year, after delivering a record 97,000 in the third quarter.
The company fared better during the same period last year with a profit of US$311 million. That means net income for this year’s quarter was down 54 percent from a year earlier.
In a conference call, Musk promised to remain “highly focused” on reaching decisions that help bolster the company’s long-term prospects.
Even so, Tesla will almost certainly post another annual loss this year, just as it has done every year since its initial public offering in 2010. Since then, Tesla has amassed more than US$5.5 billion in losses.
Separately, Ford Motor Co’s third-quarter net income tumbled nearly 60 percent as the company booked US$1.5 billion in charges mainly for restructuring, and Chinese and US sales fell.
The Dearborn, Michigan, automaker knocked about US$500 million off its pretax earnings guidance for the full year.
Ford now says it will make US$6.5 billion to US$7 billion.
Ford’s net income from July through September was US$425 million, or US$0.11 per share.
Excluding charges for restructuring, the company made US$0.34 per share. Its revenue fell 2 percent to US$36.99 billion, partly because the company bungled the launch of the Ford Explorer SUV.
Meanwhile, Daimler AG pledged to intensify efforts to cut costs and conserve cash as lingering emissions investigations collide with mounting expenses for the industry’s shift to electric vehicles.
The German manufacturer reported higher operating earnings in the third quarter, despite weaker margins for its cars and trucks divisions.
It said its outlook could come under pressure, as provisions made to cover probes into questionable diesel emissions might not suffice.
“In order to master the transformation in the next few years, we need to increase our efforts considerably,” Daimler chief executive officer Ola Kallenius, who took charge in May, said in a statement yesterday. “We have to significantly reduce our costs and consistently strengthen our cash flow.”
Daimler’s third-quarter earnings before interest and taxes rose 8 percent to 2.69 billion euros (US$2.99 billion), compared with analyst forecasts of 2.54 billion euros. The profit margins for the critical Mercedes unit narrowed to 6 percent from 6.3 percent a year earlier.
The automaker kept its outlook for unit sales, while reducing its revenue forecast for trucks to “flat.”
Additional reporting by Bloomberg
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