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Tesla (TSLA) reported third-quarter sales and profit that topped expectations, as the company doubled down on its guidance to achieve a record 500,000 vehicle deliveries in 2020 in the face of a global economy still weighed by the COVID-19 outbreak.
Shares soared by over 4% in after-hours trading, adding to a stock run-up of more than 400% for the year to date through Wednesday’s close.
Here were the main results from Tesla’s earnings report, compared to consensus estimates compiled by Bloomberg:
Q3 Revenue: $8.77 billion vs. $8.26 billion expected
Q3 Adjusted earnings per share: 76 cents vs. 55 cents expected
Ahead of its third-quarter earnings results, Tesla reported earlier this month that it had handed over a record 139,300 vehicles during the three months to September, for an increase of more than 40% over last year. Investors had been homing in to see whether the company still planned to hit a half-million deliveries for the full year.
Still, in order to meet that goal, the company would need to deliver more than 180,000 vehicles in the fourth quarter in an economy still stricken by the virus. On Wednesday, Tesla reiterated ithat it has the capacity installed to produce and deliver 500,000 vehicles this year.
“While achieving this goal has become more difficult, delivering half a million vehicles in 2020 remains our target,” the company said. “Achieving this target depends primarily on quarter over quarter increases in Model Y and Shanghai production, as well as further improvements in logistics and delivery efficiency at higher volume levels.”
The more affordable Model 3, and newer Model Y, comprised the bulk of the deliveries and all of the growth during the third quarter, while higher-priced Model S and X deliveries declined by more than 12% over last year.
Tesla, however, has been steadily slashing prices especially on its higher-end models in a move that may serve to stoke demand. Last week, it cut the starting price of the Model S twice to $69,420.
The car maker has also been ramping up production and deliveries out of its Shanghai Gigafactory, which has given the company a valuable hub in the world’s largest market for electric vehicles. And auto sales overall in China have rebounded strongly off the lows of its coronavirus lockdown, with sales climbing nearly 13% for a sixth straight monthly gain in September.
Tesla doesn’t break out vehicle deliveries by region, but analyst Dan Ives of WedBush pointed to Model 3 demand out of China as a “linchpin to the global Tesla demand picture,” according to a note this week. Tesla said Wednesday that its Model 3 production capacity had increased to 250,000 units per year, from the 150,000 annual run-rate it targeted initially after the factory first came online in December last year.
The California-based company also broke ground at its second overseas factory in Berlin earlier this year. There, construction “continues to progress rapidly,” the company said in its earnings report, and production is expected to start in 2021.
Tesla’s third-quarter results also come just weeks following the company’s inaugural “Battery Day” in late September. There, CEO Elon Musk laid out a path for the company to begin manufacturing its own “tabless” batteries to improve the cars’ range and power, and eventually help the company launch a $25,000 vehicle.
This post is breaking. Check back for updates.
Emily McCormick is a reporter for Yahoo Finance. Follow her on Twitter: @emily_mcck
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