Tesla: returns to profit in 'game changing' quarter

(CercleFinance.com) - Tesla said that it has returned to profit in the past quarter thanks to lower its operating expenses, which prompted a 20% jump in its share price on the Nasdaq today.


The US electric carmaker said in a statement that it made a net profit of 143 million dollars in the third quarter, after two consecutive quarters of losses.

That was considerably more that what analysts had been expecting.

"Free cash flow of 371 million dollars was well ahead of the 72 million dollars consensus," Jefferies analysts noted.

The results sent Tesla shares soaring 18.2% to 301.2 dollars, while the Nasdaq index was up just 0.5%.

According to Wedbush Securities, Tesla delivered a potentially "game changing" quarter.

The broker is particularly impressed by a business model which has significantly lower costs, more production efficiency, and automotive gross margins approaching 23%.

Meanwhile, New Street Research says that Tesla is currently the only profitable manufacturer of electric cars on the horizon.

"Demand continues to grow and largely exceeds supply", the research house pointed out, sticking to its 530 dollar target price.

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