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By Neal E. Boudette, Peter Eavis and Matt Phillips
Tesla on Wednesday reported a profit of $104 million, a result that surprised analysts, who were expecting the electric carmaker to lose money as the coronavirus pandemic squeezed the company on two fronts.
Sales by the time of the quarter, which ended in June, slowed as much of the economy closed and millions of others lost their jobs and cut spending. And for about two months, the company was forced to prevent production at its main plant in Fremont, California.
“We were going to make a fourth consecutive quarter of profits,” the company’s leading executive, Elon Musk, said in a conference call with analysts. “While the automotive industry has fallen by about 30% year-on-year, we control the accumulation of deliveries in the first part of the year.”
Tesla has begun painting a fourth automotive plant near Austin, Texas, Musk said, where it will produce its next pickup truck, the Cybertruck, and a new semitrailer, along with its Models 3 and Y.
Tesla’s surprise profit set it up for another major milestone: potential inclusion in the S&P 500 index. The index is one the most widely followed measures of the performance of the American stock market, with more than $11 trillion worth of mutual funds and other investments measured against it.
It is for corporations with a market price as high as Tesla’s, about $290 billion, which should not be included in the S-P 500. But the company’s inability to generate profits has consistently made it ineligible so far. (The inclusion criteria require that the sum of the company’s fully audited profits during the last 4 quarters be positive).
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