Tesla turned its first profit in more than two years, and delivered a record number of cars

Welcome to profitability.
Welcome to profitability.
Image: Marcio Jose Sanchez / AP Photo
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Tesla defied Wall Street expectations with its third quarter results, posting its first quarterly profit since 2013, and ending a streak of billion-dollar losses and manufacturing delays.

The company’s stock  jumped more than 6% in after-hours trading on the report.

CEO Elon Musk has shrugged off concerns Tesla would lose focus as it tries to launch its new Model 3, build a massive battery factory in the Nevada desert, and acquire the solar panel company SolarCity this year. The surprising results suggest he’s been able to pull it off so far.

“Things are looking good,” Musk said on a call with investors and reporters to discuss the results. “There could be some darkness ahead, but things look quite good right now.”

Tesla shipped 25,821 vehicles in the most recently completed quarter, nearly 300 more than it had expected earlier this month, and about double what it delivered during the same period last year. Revenue for the quarter was $2.3 billion, netting a profit of $21.9 million, compared to a loss of $229.9 million a year earlier. Analysts surveyed by Bloomberg had predicted a loss for the quarter amid uncertainty over how new accounting measures would affect its results.

Tesla’s cash reserves are still in rude health as well. The company reported $3.08 billion in cash and cash-equivalents as of Sept. 30, dropping slightly from $3.25 billion at the end of the previous quarter. Musk has said the company won’t raise more equity or debt in 2016, reversing plans he filed with regulators earlier this year.

“Our current plan does not require any capital raise for the Model 3,” Musk said on the call. “That’s different than saying if we should.”

He said SolarCity will be at least neutral to cash flow and perhaps a cash contributor in the first quarter of 2017.

Yet the financial reprieve may be temporary, as Tesla plans to ramp up spending yet again. It will shell out $1.8 billion by the end of 2016 to complete its $5-billion Gigafactory, an enormous battery factory it’s building with Panasonic, and launch its line of Model 3 vehicles next year. Tesla aims to manufacture 500,000 of the new cars each year by 2018, a five-fold increase over its current volume of all models.