Tesla reported a profit in the third quarter, reversing seven consecutive quarters of losses and only the third time in its history that it has achieved this milestone. The third quarter earnings, which were reported after the market closed Wednesday, rocketed shares up nearly 10% to above $316 before dropping slightly.
Tesla reported a profit of $312 million attributed to common shareholders in the three months that ended on Sept. 30, compared with a $619 million loss in the same period last year.
Tesla has had just two profitable quarters in its history, the last of which was reported in 2016.
When adjusted for one-time items, Tesla earned $516 million, or $2.90 per share, compared with a loss of $488 million, or $2.92 a share (loss), in the same period last year.
Tesla’s third-quarter earnings showed the company has a free cash flow of about $881 million compared with a negative free cash flow of $1.416 billion in the same period last year. Free cash flow is the amount of cash a company makes after accounting for capital expenditures.
The company total cash increased by $731 million to end the third quarter with $3 billion.
Tesla reported sales of $6.8 billion in the third quarter, more than doubling its revenues of $2.98 billion in the same quarter last year, driven by Model 3 deliveries. Tesla reported sales of $4 billion in the second quarter of this year.
Tesla’s automotive gross margin increased to 25.8% under generally accepted accounting principles. The company’s GAAP automotive gross margin was 18.3% in the same period last year.
Tesla reported October 2 that it delivered 83,500 electric vehicles in the third quarter, more than double from the previous period as the company steered by Elon Musk pulled out all the stops to get its newest sedan, the Model 3, to customers.
The company delivered 55,840 Model 3 sedans, up from 18,440 in the previous quarter, which was within its own guidance. The company’s delivery numbers fell just short of the 56,000 deliveries expected by a consensus of analysts surveyed by FactSet.