The wild ride that has characterized electric vehicle company Tesla shows no sign of abating as it stayed profitable in the fourth quarter after also reporting profits in the third quarter. This was a result of sales of the Model 3 sedans and the company’s leadership declared that 2019 was a turning point. Shares have increased by an impressive 11%, however, annual profits remain slippery.
According to Wall Street Journal, the net income for the fourth quarter was $105 million on $7.38 billion of revenue. The Earnings Per Share (EPS) was $2.14 against the expected $1.72 and revenue of $7.02 billion, according to statistics of Reuters on equity analysts. They also received $133 million boosts from the sales of zero emissions and regulatory credits.
The shares skyrocketed after the announcement of the results, increasing by 11% to $644.99 in Nasdaq’s after-trading hours. This is twice their value when they announced third-quarter results on the 23rd of October. The previous year represented a turnaround for the company said Tesla’s CEO Elon Musk, addressing investors. “The company showed strong demand for the Tesla Model 3, returned to profitability of GAAP in 2H19 and generated $1.1B of free cash flow for the year. We achieved strong cash generation through persistent cost control across the business.”
Following years of unstable finances, crazy stock price oscillation promises not delivered and the CEO’s constant confrontation with critics and regulators, the firm is finally showing signs of stability. It’s aiming to achieve positive generally accepted accounting principles (GAAP) in the coming quarters, with priority on growth of volume and generating cash being their main objective. This year they aspire to supply 500,000 units an increase from 367,000 in 2019, this includes an excess of 295,000 Model 3s costing $40,000 each.
In an unanticipated announcement, they stated that the production of Model Y crossovers had commenced earlier this month, which was sooner than planned. Moreover, their plant in Shanghai opened at a record time and is already operational. Preparation is already in motion for their third plant to be based in Berlin. The swelling stock prices have inflated Elon Musk’s net worth. According to Forbes his net worth now stands at $32.3 billion. Tesla has never posted an annual profit, 10 years after it went public. It had a full-year loss of $862 million on record revenue of $24.6 billion.
