Tesla Makes Money for Fourth Quarter in A Row
Tesla, to the market’s surprise, made money for the fourth quarter in a row between March and June despite shutting down its California plant for several weeks and declining sales slightly.
The electric vehicle maker also said delivering 500,000 vehicles over the year remains its target, even though it “has become more difficult to achieve.”
Tesla Inc. posted a fourth straight quarterly profit, a milestone that paves the way for the electric car maker to join the ranks of the S&P 500 index.
The results validate the unconventional efforts Elon Musk, chief executive of Tesla, made to shore up profits amid the global pandemic that is expected to leave other American automakers recording losses. The gain may further boost Tesla’s high stock price, which has quadrupled since March, in part due to speculation that the stock could enter the S&P 500.
Tesla reported a profit of 50 cents a share on Wednesday according to generally accepted accounting principles (GAAP), beating analysts’ consensus of a loss of $ 1.06 per share. Revenue fell to $ 6.04 billion, beating analyst expectations for a drop of $ 5.4 billion.
A 12-month return period meets the criteria the Standard & Poor index committee uses to decide whether to add shares to the S&P 500. Adding Tesla to the benchmark would likely compel money managers tracking the index to buy the action.
Tesla shares, which closed at $ 1,592.33 on Wednesday, rose toward the close of the session.
A year ago, Tesla was trading at around $ 260 a share. Driven by optimism about rising sales and steps to expand production abroad, the massive rebound in action so far this year has brought it to the top spot among global automakers.
Tesla warned that achieving its goal of delivering 500,000 vehicles this year has become more difficult. In January, he said he hoped to “comfortably exceed” that level of deliveries for the year.
The automaker delivered 90,650 vehicles in the second quarter, up from 88,400 in the first three months of the year, despite a long shutdown of its factory in Fremont, California.
Tesla Makes Money for Fourth Quarter in A Row - /10
Tesla, to the market's surprise, made money for the fourth quarter in a row between March and June.