Tesla Delivers Fourth Consecutive Quarter Of Profits Despite Impact Of Pandemic

Electric vehicle maker Tesla (TSLA) delivered its fourth consecutive quarter of profits – the company posted earnings of $2.18 per share, excluding one-time items, on revenue of $6.04 billion, in the second quarter of 2020.

Both figures exceeded analysts’ expectations, some of whom had projected a loss for the quarter.

In terms of Generally Accepted Accounting Principles, or GAAP, Tesla produced earnings of $0.50 per share in the quarter.

Having produced a full year of profits, Tesla is now closer to joining the S&P 500 index.

Tesla’s shares are now trading at nearly $1,600, making it the most valuable auto manufacturer in the country on the basis of market cap.

Tesla’s automotive revenue declined by 4% from $5.38 billion to $5.18 billion on year-over-year basis, although the company added a new SUV, the Model Y, and opened up a new plant in Shanghai.

“Our operating profit improved in [the second quarter] despite challenging circumstances,” Tesla stated. “Positive impacts included lower operating costs due to a temporary reduction in employee compensation expense, a sequential increase in regulatory credit revenue and deferred revenue recognition of [$48 million] related to a Full Self Driving feature release.”

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

In early July, Tesla said it delivered 90,650 vehicles for the three-month period ending in June – despite pandemic-related factory closures -- after delivering about 88,400 cars in the first quarter of the year.

“We have the capacity installed to exceed 500,000 vehicle deliveries this year, despite recent production interruptions,” Tesla noted. “While achieving this goal has become more difficult, delivering half a million vehicles in 2020 remains our target.”