TSLA Tesla Inc

By Tim Higgins 

Tesla Inc. reported a surprising first-quarter profit, fueled by the sale of regulatory tax credits and strong demand for its Model 3 compact car before the coronavirus pandemic shut down its lone U.S. factory in late March.

The Silicon Valley auto maker said Wednesday it is too soon to say how the rest of the year might be affected by efforts to quell the spread of Covid-19, which have roiled automotive markets globally and raised concerns of a prolonged recession.

"It is difficult to predict how quickly vehicle manufacturing and its global supply chain will return to prior levels," the company said. "Due to the wide range of potential outcomes, near-term guidance of net income and free cash flow would likely be inaccurate. We will again revisit our 2020 guidance in our Q2 update."

The company's first-quarter adjusted profit of $1.24 a share marked the first time in Tesla's 16-year history that it has recorded three consecutive quarters of profitability. It also defied industry analysts, who on average, expected an adjusted loss of 28 cents a share.

Those closely tracked results excluded stock-based compensation. On a net basis, the company reported a profit of $16 million attributable to common shareholders.

The quarter was a dramatic improvement from a year ago when the company posted a first-quarter loss of $702 million as Chief Executive Elon Musk struggled to export the Model 3 for the first time and the company saw an erosion of demand in the U.S.

The latest quarter was helped by an uptick in the sale of regulatory tax credits that Tesla receives for selling electric vehicles. Revenue from those sales to competitors, which is mostly profit, rose to $354 million from $216 million a year ago.

The company's shares climbed more than 3% in after-hours trading.

Write to Tim Higgins at Tim.Higgins@WSJ.com

(END) Dow Jones Newswires

April 29, 2020 17:06 ET (21:06 GMT)

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