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(Bloomberg) — Tesla Inc. surpassed Wall Street estimates for earnings in the third quarter and projected a slight increase in deliveries for the current year, reflecting a rebound in demand for its electric vehicles.
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The company on Wednesday reported adjusted earnings of 72 cents per share for the quarter, above the average analyst estimate and snapping four consecutive quarters in which the measure missed expectations. It reiterated plans to start production of more affordable models in the first half of 2025, saying it projects 50% growth next year over its 2023 production volumes.
Shares of the company soared as much as 12% in postmarket trading Wednesday after closing regular trading down 14% for the year.
Tesla said it expects another strong quarter of deliveries after a record third quarter, anticipating higher volumes for the full year. It won’t be easy, given the slowdown in deliveries Tesla posted in the first half of the year, and the carmaker will need to significantly increase sales in the fourth quarter to surpass — or even match — 2023’s level.
Chief Executive Officer Elon Musk said he expects to see continued growth next year, providing a “rough estimate” of delivery volumes. “I think it’s 20% to 30% vehicle growth next year, notwithstanding negative external events,” he said on a conference call with analysts.
Tesla said its Cybertruck, which it first delivered late last year, has reached profitability for the first time, thanks in part to increases in production for the futuristic pick-up truck. The company’s third-quarter automotive gross margin, excluding regulatory credits, was 17.1%, up from the previous quarter, when it was 14.6%.
Seth Goldstein, an analyst with Morningstar, said Tesla is benefiting from higher volumes and more stable prices. “Prices are stabilizing and unit costs are coming down,” he said in an interview.
Low Expectations
Garrett Nelson, an analyst with CFRA Research, said investors had a low bar for this quarter and questioned whether Tesla can sustain that level of profitability.
“Expectations were low heading into the release after four consecutive bottom-line misses and a Robotaxi Day that left investors with more questions than answers” Nelson said in a research note to clients.
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