Car Industry

Tesla turns a profit: $22m in Q3 income

Has Tesla turned the corner? The company's Q3 numbers show a profit. A small one, but a profit nevertheless.

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Tesla has just bestowed its Q3 2016 numbers upon us and, unlike last quarter, the numbers are good. The company has $22 million in GAAP income on $2.3 billion in revenue. That's up significantly over both the quarter before, and this same quarter a year ago. The profit of $0.14 per share compares very favorably to the $0.58 loss per share this time last year on $1.24 billion in revenue.

In the previous quarter, Tesla posted a $150 million loss on $1.56 billion in non-GAAP earnings, or about $1.06 per share. That was significantly worse than analysts had expected, but more problematic was the disappointing delivery numbers. Tesla shipped fewer than 15,000 cars in the first quarter, putting the company well short of its goal of 80,000 in production for the year.

For this quarter, Tesla had planned on producing 2,200 car per week, accelerating to make up the gap, and the company appears to have very nearly met that goal, delivering a solid 24,821 cars.

However, average prices for those cars were down, the Model S on average 6.5 percent lower than before, the Model X 1.2 percent. For the former, that decline was thanks to the lower-cost 60, while the latter was thanks to sales of fewer Signature editions (and, perhaps, the short-lived Model X 60D).

Despite Consumer Reports latest findings, Tesla indicates that it is seeing fewer warranty claims for both the S and the X, with reports on the latter decreasing by a whopping 92 percent. That is a nice improvement, but it's also an unfortunate indication of just how problematic those early cars were.