Coverage: Tesla Motors soars after quarterly profit

Tesla Motors Inc. reported a surprise profit on Wednesday, sending its stock price soaring.

Robert Ferris of CNBC.com had the news:

In a conference call Wednesday night, Tesla CEO Elon Musk said the company currently believes the fourth quarter will be profitable excluding non-cash stock-based expenses, and added there is a “chance” Tesla will be profitable even taking those things into account.

Tesla said it earned 71 cents a share on an adjusted basis in the third quarter on $2.3 billion in revenue. Analysts expected a loss of 54 cents per share on $1.98 billion in revenues, according to a Thomson Reuters consensus estimate.

The company cited new product launches, increased store efficiency, and new store openings as some of the major factors driving third-quarter results. The company added its recent improvements to its self-driving hardware position it for additional market share gains.

The earnings come weeks after Tesla announced record delivery and production numbers, beating out second-quarter delivery and production numbers by 70 percent and 37 percent, respectively.

Matthew DeBord and Akin Oyedele of Business Insider noted Tesla’s stock rose as much as 7 percent:

The shares rose as much as 7% after the results, which cap off a period during which the company struck a multi-billion takeover and reported a substantial ramp-up in deliveries. Investors are focusing on Tesla’s cash-burn and potential need for additional funds, as it expands production and absorbs solar-power company SolarCity, which it agreed to buy in August.

Tesla said it delivered 24,821, vehicles in the third quarter (300 more than it initially reported), and maintained its second-half estimate of 50,000 deliveries, at the low end of its full-year guidance of 80-90,000.

The company is spending to ramp up Model X SUV production and bring its Nevada battery factory online. The company’s third-quarter capital expenditure was $247.6 million, well short of analysts’ estimate of $763 million. The company ended the quarter with $3.1 billion in cash and lowered its outlook for capital expenditures for the year to $1.8 billion from the $2.25 billion it had targeted earlier.

Narottam Medhora and Alexandria Sage of Reuters noted that Tesla doesn’t need more capital for its Model 3:

The electric carmaker also signaled it has substantially reduced the costs for launching production of its high volume Model 3 sedan next year. Musk told analysts the company’s current plan “does not require any capital raise for the Model 3 at all.”

The tech billionaire said Tesla could still raise capital to “account for uncertainty … and de-risk the business,” however.

The third quarter profit and a leaner capital spending plan could help grease the wheels for Musk if he does seek to tap the markets for cash. Turning a profit, even for one quarter, should help counter skeptics who have questioned his ambitious plans for combining Tesla and solar panel maker SolarCity (SCTY.O) into a company offering roof-to-garage no-carbon energy systems.

Musk has made promises to investors before related to the timing of product launches, production and profitability, only to walk them back.

The company has weathered a difficult few months, beginning with the death of a Model S driver using Autopilot, Tesla’s much vaunted semi-autonomous driving system, and culminating in the decision to acquire debt-laden SolarCity, which has increased scrutiny on the finances of both Tesla and SolarCity.