DETROIT (AP) — Tesla eked out a small first-quarter net profit just as the coronavirus started to affect the electric car and solar panel maker.
The company said it made $16 million from January through March, or 8 cents per share. It was the third straight profitable quarter for the Palo Alto, California, company.
It appears the virus may force Tesla to dial back its forecast produce more than 500,000 vehicles in 2020. Although the company said it has the capacity to make a half-million vehicles, it’s uncertain how quickly its California plant can ramp up after being shut down due to the virus.
Excluding one-time items, Tesla learned $1.24 per share. That easily beat Wall Street estimates of a 28-cent-per-share loss, according to Factset.
Revenue for the quarter was up 32% to $5.55 billion. That missed Wall Street expectations.
Shares of Tesla leaped more than 10% to $882.98 in extended trading Wednesday after the results were released. Tesla stock has more than doubled in value so far this year.
The profit came as the virus forced Tesla to shut down its Fremont, California, assembly plant late in the quarter on March 23, cutting into production and sales as the plant was starting to crank out the new Model Y SUV.
Yet the company reported stronger-than-expected first quarter global sales. Tesla delivered 88,400 vehicles during the first three months of the year, a 40% increase from a year ago. That was aided by production at its new factory in Shanghai.
As other automakers move to reopen their U.S. factories, it’s unclear when Tesla will be able to restart production in Fremont. Six counties in the San Francisco Bay area, including the Fremont area, are under a shelter-in-place order until the end of May.
CEO Elon Musk, in an apparent protest against the order, wrote “FREE AMERICA NOW” on Twitter early Thursday. He also praised Texas for reopening businesses.
Tesla burned through $236 million in cash during the quarter and finished it with roughly $8.5 billion after selling $2 billion worth of additional shares.
“We believe we are well-positioned to manage near-term uncertainty while achieving our long-term plans,” the company said in its quarterly investor letter.
Tesla said it is managing working capital and cutting non-critical spending.
The first-quarter net profit was the first in its history for the seasonally weak quarter. The Model Y, the company said, was profitable in its first quarter, a first for a Tesla vehicle.
Tesla said its near-term profit guidance is on hold, but it expects profitability “with (factory) capacity expansion and localization plans underway.”
In January, the company predicted net profits into the future, with possible temporary exceptions. It warned that the coronavirus could have a small impact on first-quarter profitability.
Morgan Stanley analyst Adam Jonas wrote in a note to investors that continued U.S. growth for Tesla is still a bit of a “show me” story. Jonas wrote that it’s hard to see how the company can be immune from the impact of a recession and expected auto sales downturn.
“At the end of the day it is an auto company in a recession,” wrote Jonas, who predicts a 17% drop in U.S. auto sales this year even with a government stimulus program.
