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Tesla released its third quarter (Q3) earnings report a week ahead of schedule. The carmaker reported a better-than-expected revenue, driving Tesla stock up 12%.
Tesla’s success story
The company earned a revenue of $6.82 billion, more than the expected $6.33 billion. Tesla also reported $881 million in free cash flow. This is the third time the corporation has turned a profit since Tesla’s initial public offering (IPO) went public in 2010.
Tesla's Q3 earnings increased after improved sales of its Model 3 sedan. The carmaker noted in terms of revenue that the vehicle was the best-selling car in the US and fifth best-selling by volume.
Elon Musk’s tweet trouble
Even though Tesla had a positive earnings report, the company’s founder, Elon Musk, has made more news recently for his online antics than for his electric cars. The carmaker’s chief executive officer (CEO) encountered controversy when he tweeted in August about securing private funding for Tesla. The US Securities Exchange Commission (SEC) sued Musk and accused him of trying to manipulate the stock price of the corporation. The company’s CEO and Tesla paid a combined $40 million fine. The SEC also forced him to step down as chair of the corporation for three years. Investors have urged Musk to stop tweeting, since shares of Tesla fell 7% after Musk insulted the SEC in a tweet.
Vindication for Musk and looking forward to Q4
The growth of Tesla’s revenue provides relief to Musk and gives a rebuke to investors who were short selling the carmaker’s stock. The embattled entrepreneur and company thanked their supporters for remaining with the company during the corporation's turbulent ride on the US stock market.
‘Sufficient Model 3 profitability was critical to make our business sustainable – something many argued would be impossible to achieve,’ noted Tesla in a statement to stockholders. ‘We can’t thank you enough for your support. We would not have achieved this historic quarter without it.’
The company expects to have flat or positive cash flow in Q4.
‘Our cash position should remain at least flat in spite of our plan to repay $230 million of convertible notes in cash during Q4,’ said Tesla.
The carmaker is also ramping up production of its more affordable Model 3 car by buying a factory in China.