Tesla surprised Wall Street on Wednesday by reporting $143 million in net income in the third quarter as cost reductions more than offset a slight decline in revenue.
The electric-car maker said it had earnings of $1.86 per share on an adjusted basis. Revenue was $6.3 billion in the quarter.
Analysts had expected a loss of 46 cents per share and revenue of $6.4 billion, according to FactSet.
“Investors will love the results,” said Erik Gordon, a business professor at the University of Michigan who follows the auto industry.
The news sent Tesla’s shares up 17 percent after the close of regular trading.
Tesla said it removed “substantial cost” from its operations.
“Operating expenses are at the lowest level since Model 3 production started,” the company said in a statement. “This year our focus has been on cost control and preparing for our next phase of growth.”
Tesla said capital expenditures totaled $385 million in the quarter. That was more than the $250 million spent in the second quarter, but down from $510 million in the third quarter a year ago.
At the same time, it said its cash on hand grew to $5.3 billion, an increase of $383 million.
The company said that construction of its Shanghai factory was ahead of schedule and that trial production had started there. Its next vehicle, the Model Y, a roomier version of the Model 3, is now expected to be in production by next summer. Previously, Tesla had said that car would not arrive until late next year.
Tesla reported this month that it delivered 97,000 cars in the third quarter, up from 95,000 in the second quarter. But the sales gain reflected demand for its least expensive offering, the Model 3.
The most affordable version of the Model 3 sells for $39,500. The Model S luxury sedan and Model X sport utility vehicle sell for $80,000 and up, but their sales have fallen as Model 3 production has increased. In the third quarter, Model S and X sales totaled 17,400 vehicles, compared to Model 3 sales of 79,600.
Before the earnings report on Wednesday, Tesla’s stock closed at $255, down about 18 percent since the beginning of the year, although Tesla still has a market value of $46 billion, about $10 billion more than Ford Motor.
Tesla has forecast it will sell 360,000 to 400,000 cars this year, and to reach the bottom of that range it will need fourth-quarter sales of 105,000 vehicles.
Automakers typically see strong sales in the year’s final three months, and Tesla could benefit if consumers in the United States rush to take advantage of the $1,875 federal tax credit available to buyers of Tesla vehicles. The tax credit will cease at the end of the year.