Tesla turns a profit as CEO Elon Musk delivers on pledge

Tesla shares jumped more than 10 percent in after-hours trading Wednesday after the electric-car maker delivered on CEO Elon Musk’s promise to turn a profit by the end of 2018.

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The company posted adjusted earnings per share of $2.90 on net income of $311.5 million, eclipsing Wall Street’s expectations for a 19-cent loss, according to Refinitiv data. Third-quarter revenue was $6.83 billion, outpacing a projected $6.3 billion. Tesla had free cash flow of $881 million.

“Q3 2018 was a truly historic quarter for Tesla,” the company said in a press release. “Model 3 was the best-selling car in the U.S. in terms of revenue and the fifth best-selling car in terms of volume.”

Musk vowed in May that Tesla would achieve profitability in the second half of 2018 for the first time in five years. The company has spent aggressively to develop the Model 3, its first attempt at a mass-market sedan, and meet production benchmarks amid close scrutiny on Wall Street.

Tesla said it produced 5,300 Model 3s in the final week of the third quarter, as well as an average of 4,300 per week throughout the period. The company previously disclosed that it produced roughly 80,000 vehicles in the third quarter, including 53,239 Model 3s.

Tesla achieved a profit despite a series of high-profile distractions involving Musk. The tech executive reached a $40 million settlement with the U.S. Securities and Exchange Commission and agreed to step down as chairman after federal officials charged him with fraud for claiming last August that he had “funding secured” to take Tesla private. The funding never materialized, and Tesla ultimately scrapped the take-private plans.

The company reported third-quarter earnings a week ahead of its historical schedule, fueling speculation ahead of the report that Tesla had turned a profit.