One of the most anticipated quarterly earnings results that analysts were looking forward to were Tesla’s (NASDAQ: TSLA) second quarter financials. Despite having seen strong performance so far this year, investors were wondering whether or not the company would be able to maintain its growth trajectory – as well as profitability – going into this quarter. However, it seems like Tesla is doing just fine, with the company reporting its fourth consecutive quarterly profit on Wednesday.
For the first time in the company’s entire history, Tesla has managed to be profitable for an entire full year. Overall, the company posted a modest $104 million profit for its second quarter. While that’s not a whole lot, it does mean a lot symbolically for the company, which has historically struggled to be profitable despite Elon Musk’s promises that the company would be cash-flow positive soon.
Musk also went on to confirm in a call with analysts on Wednesday that Tesla had picked Austin, Texas, as the next location for its newest assembly plant. The company went on to confirm that it has achieved its original goal of producing over 500,000 vehicles this year despite the pandemic, which is a 36% increase from 2018.
“Although we have successfully ramped vehicle production back to prior levels, it remains difficult to predict whether there will be further operational interruptions or how global consumer sentiment will evolve in the second half of 2020,” stated Tesla in an official press release. “We need to, you know, not go bankrupt, obviously, that’s important….But we’re not trying to be super profitable, either. I think just we want to be like slightly profitable and maximize growth and make the cars as affordable as possible,” added Musk in a conference call later on Wednesday.
Shares of Tesla ended up jumping around 6% in light of this news, quite possibly moving upwards even more on Thursday’s trading session. Many investors and analysts were wondering whether or not Tesla would be able to sustain its profitability in light of this coronavirus pandemic. The company has shown a degree of resilience that is incredibly impressive, especially since electric cars would be considered more of an optional “want” rather than a necessary “need.” However, it seems that Tesla is set to have its best year in history in spite of everything that’s going on.
With the stock already trading at record highs with a market cap closing in on $300 billion, it looks like Tesla bulls were right to have held onto there stock for so long after all.
Tesla Company Profile
Founded in 2003 and based in Palo Alto, California, Tesla is a vertically integrated sustainable energy company that also aims to transition the world to electric mobility by making electric vehicles. It sells solar panels and solar roofs for energy generation plus batteries for stationary storage for residential and commercial properties including utilities. The Tesla Roadster debuted in 2008, Model S in 2012, Model X in 2015, Model 3 in 2017, and Model Y in 2020. Global deliveries in 2019 were 367,656 units. Tesla went public in 2010 and employs about 50,000 people. – Warrior Trading News