DETROIT (AP) — Electric car maker Tesla Motors posted its first quarterly profit in three years on Wednesday, giving investors reason to cheer after months of doubt.
Tesla's shares have fallen in recent weeks as some investors questioned the company's proposed merger with solar panel maker SolarCity Corp. Earlier this month, Goldman Sachs downgraded Tesla's shares from "buy" to "neutral" and lowered its price target, saying the potential merger could delay the release of the Model 3.
But Tesla CEO Elon Musk said in a letter to investors that the third quarter showed Tesla could meet its goals while keeping one eye on opportunities for future growth.
Tesla reported net income of $21.9 million, or 14 cents per share, up from a loss of $229.9 million in the July-September period a year ago.
Revenue more than doubled to $2.3 billion. That included $149.7 million in non-automotive revenue — up 78 percent from last year — as Tesla's energy storage business grew.
Tesla, which went public in 2010, has had only one other profitable quarter: the first quarter of 2013. But the company said it expects to report a net income in the fourth quarter of this year.
The results surprised Wall Street, which forecast a loss of 86 cents, according to analysts polled by FactSet. Analysts had expected revenue of $2.2 billion.
Tesla's shares rose 5 percent to $211.98 in after-hours trading.
Tesla delivered 24,821 vehicles during the quarter, an increase of 72 percent over the same period last year. The Palo Alto, California-based company said Wednesday it still expects to deliver just under 80,000 vehicles worldwide this year, up from 50,500 in 2015.
Tesla said it also remains on track to start deliveries of its $35,000 Model 3 electric car in the second half of 2017.
Musk, who is chairman and CEO of Tesla as well as chairman of SolarCity, proposed in June that Tesla buy SolarCity for around $2.45 billion. Shareholders of both companies will vote on the proposal on Nov. 17.