What happened
Tesla (TSLA 2.63%) stock is trading higher on Thursday, up 9.9% a10:51 a.m. EDT. At one point, the electric-car maker's stock was up as much as 11%.
Tesla's gain on Thursday follows the company's second-quarter earnings release after market close on Wednesday. Tesla's less-than-expected cash burn, CEO Elon Musk's apologies for his attitude in a previous earnings call, and big guidance were likely some of the main reasons for the stock's run-up.
Model 3. Image source: Tesla.
So what
Tesla's second-quarter revenue increased about 43% year over year to $4 billion, beating a consensus analyst estimate for revenue of about $3.92 billion. The strong revenue growth was driven primarily by an 85% year-over-year increase in vehicle deliveries.
Tesla's non-GAAP loss per share of $3.06 was wider than a consensus analyst forecast for a loss of $2.92, but it importantly narrowed compared to the automaker's first-quarter loss per share of $3.35. The loss was significantly wider than Tesla's non-GAAP loss per share of $1.33 in the year-ago quarter, due to the automaker's costly Model 3 production ramp-up.
Showing signs that the Model 3 production ramp-up is benefiting from greater scale, Tesla's negative free cash flow improved from negative $1.05 billion in the first quarter of the year to negative $739 million in Q2. This negative free cash flow was better than a consensus forecast for negative free cash flow of about $900 million.
Musk also directly apologized to two analysts he cut off in a recent earnings call, giving investors less reason to worry about the CEO's recent pattern of regularly lashing out at detractors.
Now what
Tesla maintained its guidance for profitability in both Q3 and Q4. Not only does Tesla expect to be profitable on a GAAP basis, but it expects to generate cash flow, increasing its cash position in both quarters.
Tesla also said that after having achieved a Model 3 production rate of around 5,000 units per week a month ago, it's now aiming to produce 6,000 Model 3 vehicles per week by late August.
