Tesla's Q3 profit came the old-fashioned way: by cutting costs. - Business Insider

  • 📰 BusinessInsider
  • ⏱ Reading Time:
  • 46 sec. here
  • 2 min. at publisher
  • 📊 Quality Score:
  • News: 22%
  • Publisher: 51%

United States News News

United States United States Latest News,United States United States Headlines

Tesla posted a surprise profit the old-fashioned way — by cutting costs. Here's why that's a positive sign.

We could be looking at a brave new Tesla — but a Tesla that has to embrace spending discipline in ways it hasn't before.Tesla vaporized Wall Street expectations on Wednesday when the company swung to a quarterly profit. Tesla has posted third-quarter profits before, but this time around, the mechanism behind the margin was somewhat different.

The obvious answer is that Tesla's revenue is sliding. For Q3, it landed much closer to $6 billion than the 2018 quarter's $7 billion. Simple math takes over here: less money coming in demands less money going out, to yield a positive bottom line. For the quarter, that equation spit out a thin surplus of $143 million. Tesla used the oldest trick in the business book: it cut its way to profitability.

The next question is whether that's preferable to Tesla's financial model of the past decade and a half, which is basically to take capital and incinerate it, promising only wild stock-trading volatility in return.Personally, I'd take the boring, essentially nonmargin business at this point. I'd rather have a more exciting, fat-margin luxury electric-vehicle business, but CEO Elon Musk appears to want to kill that offHowever, I'm not going to argue with discipline.

We have summarized this news so that you can read it quickly. If you are interested in the news, you can read the full text here. Read more:

 /  🏆 729. in US
 

Thank you for your comment. Your comment will be published after being reviewed.
Please try again later.

United States United States Latest News, United States United States Headlines

Similar News:You can also read news stories similar to this one that we have collected from other news sources.

What to watch: Busiest Q3 earnings day and Tesla shares surge on surprise profitAfter Wall Street managed to eke out small gains Wednesday, a similar session appears ahead today, with U.S. stock futures modestly higher. Wait, what? Tesla pulled a profitable 3rd quarter? I confess I am rooting for ElonMusk . We need to hurry and colonize outer space so I can start mining Low Temperature Diamonds and Void Opals from the asteroid belt before some space cowboy prospector jumps my claim.⛏️🚀
Source: CNBC - 🏆 12. / 72 Read more »

Chips On the Table: Intel And Advanced Micro Devices Set To Report Q3 EarningsTwo major players in the chip industry—Intel and Advanced Micro Devices—are getting ready to report earnings this week and next as they battle it out in the semiconductor market.
Source: Forbes - 🏆 394. / 53 Read more »