Tesla posts surprise quarterly profit, sets deliveries record

Tesla posted a surprise quarterly profit on Wednesday, making good on Chief Executive Officer Elon Musk’s promise, and said it was “highly confident” in exceeding its target of delivering more than 360,000 cars this year.

Shares of the company shot up 14% to $291.39 in extended trading after Tesla also confirmed that it was producing vehicles on a trial basis at its Gigafactory in Shanghai.

“We have cleared initial milestones toward our manufacturing license and are working towards finalizing the license and meeting other governmental requirements before we begin ramping production and delivery of vehicles from Shanghai,” the company said in a statement.

The company delivered about 79,600 Model 3 mass-market sedans in the third quarter, beating the average estimate of 79,470.

Tesla’s Model 3 is the backbone of its growth strategy, and Musk has been under pressure to deliver the car to new international markets efficiently, while keeping a lid on costs.

Earlier this year, the company had set a target of delivering 360,000 to 400,000 vehicles in 2019, implying it needs to deliver at least 104,800 vehicles in its final quarter to meet the low end of its full-year forecast.

The company also said production of its Model Y electric sports utility vehicle was ahead of schedule and is expected by summer 2020.

The electric car maker’s net income attributable to common shareholders was $143 million, or 78 cents per share, for the third quarter, compared with $311 million, or $1.75 per share, a year earlier.

Excluding items, Tesla posted a profit of $1.86 per share. Analysts were expecting a loss of 42 cents per share.

However, revenue fell nearly 8% to $6.30 billion in the quarter ended Sept. 30. Analysts had expected revenue of $6.33 billion, according to IBES data from Refinitiv.