Tesla Hits Record on First Quarterly Profit: San Francisco Mover
April 1 (Bloomberg) -- Tesla Motors Inc., the electric-car maker headed by billionaire Elon Musk, climbed to a record after saying it turned its first quarterly profit on higher-than- forecast sales of its controversial Model S sedan.
Tesla rose 16 percent to $43.93 at the close in New York. The stock has gained 30 percent this year, topping the 9.5 percent rise in the Standard & Poor’s 500 Index. Tesla’s previous closing high was $39.48 on Feb. 7.
Tesla’s profitability is a milestone for a company that has been at the center of debate over the future of electric cars. The Palo Alto, California-based company sold more Model S sedans than it had previously projected, as Musk, 41, led the defense against a New York Times story in February that questioned the car’s driving range.
“For Tesla to be in the black is a positive sign, and it’s a little bit surprising given the lukewarm reception we’ve seen with a lot of the other electric vehicles in the marketplace today,” Alec Gutierrez, an analyst with auto-market researcher Kelley Blue Book, said by telephone.
Tesla sold at least 250 more Model S sedans than the 4,500 units it had forecast in February. As a result, the company reached “full profitability” during the first quarter, according to a Tesla statement yesterday that didn’t specify the profit figure.
The average analyst estimate compiled by Bloomberg calls for a loss of 11 cents a share, excluding some items. Tesla hasn’t previously reported a quarterly profit in its three years as a public company.
“The progress on sales and profitability significantly reduces risk around TSLA’s cash flows, which have been a primary area of investor concern,” Elaine Kwei, an analyst at Jefferies Group, wrote today in a report. “We expect a high level of media attention over the next several days and correspondingly higher levels of activity in the stock,” wrote Kwei, who has a buy rating on the stock.
Tesla’s Model S has been at the center of disputes over the viability of electric cars that intensified following a Feb. 8 story in the New York Times. The article detailed a test drive between Washington and Boston that ended with a stalled Model S being loaded onto a tow truck.
Musk called the Times’ report “fake” and told Bloomberg Television that it trimmed Tesla’s stock-market value by as much as $100 million. The public editor for the newspaper said its reporter didn’t use good judgment and “left himself open to valid criticism...”