Tesla Inc. reported a surprise second-quarter GAAP and adjusted earnings on Wednesday night, sending the stock more than 5% higher in the extended session. Sales also exceeded Wall Street expectations.
Tesla TSLA,
He said he earned $ 104 million, or 50 cents a share, in the quarter, compared with a loss of $ 408 million, or $ 2.31 a share, in the prior-year quarter.
Adjusted for one-off items, Tesla earned $ 2.18 per share, balancing on an adjusted loss of $ 1.12 per share a year ago. Sales fell 5% to $ 6.04 billion from $ 6.4 billion a year ago.
Analysts surveyed by FactSet expected an adjusted loss of 2 cents per share on sales of $ 5.15 billion.
The numbers were “very strong,” establishing Tesla for inclusion in the S&P 500 index, Alyssa Altman said with Publicis Sapient.
“Tesla is showing the market that they move fast, make quick decisions and are not afraid of failure,” he said. “They made bold choices to cut costs while continuing to launch a new model with all the challenges of launching a new model. In doing so, they are seeing the success and confidence of the market. Any benefit in this environment is good and shows resistance in uncertain times. “
The “real news,” said Gene Munster of Loup Ventures, “is that Tesla achieved profitable and free cash flow with sustainable measures.” The company did not pull a single lever to reach profitability. “
In a letter to investors on its website, Tesla said its progress in the first half of the year “has positioned us for a successful second half of 2020. Production from our existing facilities continues to improve to meet demand, and we are adding more capacity. “
Tesla did not provide a perspective for 2020, saying it was still “difficult” to predict stops and changes in consumer sentiment for the second half of the year.
As it had in its first quarter shareholder letter, Tesla did not address the ongoing pandemic directly, and the word only appears in standard legal disclosures at the end of the document.
It also kept its 2020 targets unchanged from its first-quarter letter, again mentioning “ability” to achieve the milestone of selling more than half a million vehicles in the year.
“We have the installed capacity to exceed 500,000 vehicle deliveries this year, despite recent production interruptions. While achieving this goal has become more difficult, delivering our half a million vehicles by 2020 remains our goal, “he said in the letter.
It has enough liquidity is enough to finance production and long-term capacity expansion plans, he said.
The company said it continues to build capacity for the Model Y, its compact SUV, at factories in Berlin and Shanghai, and that it is on track to begin sales of the Model Y from both locations in 2021.
The next US “gigafactory” site has been selected and preparations are underway, the company said, without disclosing the location.
As of Wednesday, the Silicon Valley automaker had reported three consecutive quarters of GAAP and adjusted earnings. That fourth consecutive quarterly profit prepares you to join the S&P 500 Index in a few months.
Tesla pegged the surprise benefit at “fundamental operating improvements,” with costs with factory shutdowns offset by cost-cutting measures. GAAP operating margin reached almost 5%, the company said, adding that it expects it to continue “to grow over time, reaching industry-leading levels.”
Earlier this month, Tesla reported that second-quarter sales crushed Wall Street’s expectations, even when its only US auto manufacturing factory was closed for most of the quarter under local shelter orders.
The surge in sales was one of the recent catalysts for the stock recovery, which has brought Tesla’s market valuation to around $ 300 billion, some $ 95 billion ahead of Japan’s Toyota Motor Corp. TM
and the world’s leading automaker by market value. The shares ended at a record $ 1,643 on Monday, and hit an intraday record of $ 1,794.99 on July 13.
In April, Tesla also surprised investors by posting a first-quarter profit. Chief Executive Elon Musk upheld the surprises in a post-earnings call with analysts, diverting the script to condemn the closures in place to curb the spread of the virus and compare them to fascism.
Musk also ignited Twitter and legal disputes that led President Donald Trump to intervene in the factory closure.
The Tesla factory in Fremont, California reopened in May in defiance of local shutdown orders. The confrontation was finally resolved, with Tesla reopening the plant after filing a health and safety plan with local authorities.
See also:Tesla stock is ‘overheated’; be cautious despite hype, BofA analysts say
Earlier Wednesday, analysts at Bank of America Securities maintained their cautious stance on Tesla, saying the stock was overheated and urging investors to “remain cautious despite the hype and momentum.”
Analysts raised their price target on the stock to $ 800, from $ 500, but kept its equivalent of a sell rating. The average Tesla price target of 31 analysts surveyed by FactSet is $ 912, with the top of the range above $ 1,500.
Tesla shares have gained nearly 300% this year, compared to gains of around 1% for the S&P 500 SPX index,
and in contrast to a loss of around 6% for the DIA Jones Industrial Average DJIA,
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