LOS ANGELES -- Tesla Motors Inc. shares surged today after the company posted its first quarterly profit in its 10-year history -- driven by sales of the battery-powered Model S sedan.
First-quarter net income totaled $11.2 million from a loss of $89.9 million a year earlier, Tesla said Wednesday.
The news sent Tesla shares soaring today -- closing with a gain of 24 percent to close at $69.40 on the New York Stock Exchange. As of Wednesday, the shares already had increased 65 percent this year, compared with a 15 percent rise in the Russell 1000 Index.
Excluding some items, the profit was 12 cents a share, compared with a year-earlier loss of 76 cents.
The average estimate of 10 analysts surveyed by Bloomberg was for a profit of 4 cents.
The company's revenue surged to $561.8 million from $30.2 million in the year-earlier quarter, which was before Model S production began.
Tesla said it sold 4,900 Model S cars in the first quarter. The company said March 31 that deliveries of the sedan exceeded 4,750 for 2013's first three months, better than its prior forecast of 4,500.
Tesla raised its full-year forecast to about 21,000 Model deliveries from 20,000.
"We exceeded our own target for deliveries," Tesla CEO Elon Musk and Chief Financial Officer Deepak Ahuja said in a statement posted on the company's Web site. "2013 is off to a strong start."
The profit is a milestone for a company that has been at the center of debate over the future of electric cars. Tesla has been counting on the Model S to deliver the electric-car maker's first profit.
Zero-emission credits
A big chunk of Tesla's first-quarter revenue and profit came from $68 million in zero-emission vehicle credits sold to other automakers. Without the ZEV credits, Tesla would have posted a net loss of $57 million for the quarter.
In a conference call, Musk discounted the ZEV credits as basically a one-time gain. He said Tesla's ZEV credits will slide to nearly zero by year end as market demand for the credits becomes saturated by the end of the third quarter.
Musk believes that, even without the ZEV credits, that Tesla will achieve a 25 percent gross margin return by the end of the fourth quarter, "unless we really screw the pooch."
Much of that fatter margin will come from economies of scale from suppliers tooling up factories for more volume, now that Tesla has demonstrated it's a viable business, Musk said.
"A lot of them didn't believe we would do these numbers, and they didn't tool up to the level of production," Musk said in the conference call with analysts. "Some thought we would do 3,000 total [vehicles] over life of product. Then it's, 'Yeah, we did that last quarter,' so now they are tooling up."
Musk said Tesla was cash-flow positive in the first quarter, and will be cash-neutral in the second quarter.
"There are no plans right now to raise funding. If we were to do a round it would be to ensure [our cash flow] if there were some sort of supplier interruption, some force majeure event," Musk said.
Musk led the company's defense of the Model S against a New York Times story in February that questioned the car's driving range in cold weather.
The Times story described a test-drive between Washington and Boston that ended with a stalled Model S being loaded on a tow truck.
Musk called the report "fake" and told Bloomberg Television it trimmed Tesla's stock-market value by as much as $100 million. The public editor for the newspaper said its reporter didn't use good judgment and "left himself open to valid criticism."
Top seller
Tesla ended the quarter as the top seller of rechargeable autos in North America. Its Model S deliveries exceeded the 4,421 sales of GM's Chevy Volt plug-in hybrid and 3,695 deliveries of Nissan Motor Co.'s Leaf.
Despite continued demand for the Model S, Tesla is not going to increase its run rate, Musk said.
"We need to make sure our house is in order before we push volume. There is a potential next year for a significant increase in volume," Musk said. "But we don't want to just ramp volume and not have taken care of our gross margin, or have bad service and just dump a ton of product on the market."
Tesla is considering eventually adding driverless technology to its vehicles and is discussing the prospects for such systems with Google Inc., Musk said last week in an interview.
Mark Rechtin and Bloomberg contributed to this report.
