Another big day for Tesla – posts Q2 profit

Electric vehicle company Tesla (NASDAQ: TSLA) posted a $104 million profit in the second quarter of 2020, riding a boom in regulatory credit revenue and a higher than expected number of vehicle sales despite manufacturing setbacks tied to the coronavirus shutdowns.

The company beat analyst revenue and earnings per share estimates, registering revenues of $6.04 billion compared to consensus estimates of $5.4 billion. Earnings per share clocked in at $0.50 compared to an expected loss per share of $1.06.

“Our business has shown strong resilience during these unprecedented times,” the company stated in its earnings update, released on Wednesday, July 22. “Despite the closure of our main factory in Fremont for nearly half the quarter, we posted our fourth sequential GAAP profit in Q2 2020, while generating positive free cash flow of $418 million.”

Tesla credited the quarter’s “positive impacts to a temporary reduction in employee compensation expense, an increase in regulatory credit revenue and deferred revenue recognition of $48 million related to a self-driving feature release.”

During the second quarter of 2019, Tesla reported $111.2 million in revenue from regulatory credits. That number grew to $428 million in the second quarter of 2020.

The electric vehicle maker said it delivered about 90,650 vehicles in the second quarter. Analyst estimates compiled by Bloomberg had forecast 83,000 vehicle deliveries.

“These positive contributions were offset by significant costs related to factory shutdowns, as well as a sequential increase in non-cash SBC [stock-based compensation] expense primarily attributable to $101 million to 2018 CEO award milestones,” the earnings update said.

Tesla shares surged on Wednesday, continuing an epic stock rally that has boosted the company’s valuation by 190% in the past six months.

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