Industry

By virtually every rule of finance, Tesla’s third-quarter numbers represented a step back.

Its profit, revenue, operating margin and free cash flow were all lower than a year earlier.

But, as everyone should know by now, Tesla doesn’t always follow the accepted rules of the auto industry. Neither does its stock, which jumped 18 percent the next day — the biggest gain in six years.

Hours after Ford Motor Co. annoyed its investors with a slight reduction in its full-year profit forecast, Tesla shareholders were shocked to see any profit at all from a company that had finished a quarter in the black only four times before.

To generate $143 million in net income, Tesla leaned on two revenue sources Ford doesn’t have. It sold $134 million in emissions credits to competitors, and it recognized deferred revenue from a feature that many customers paid for ahead of its activation. The controversial feature, called Smart Summon, lets owners remotely beckon their car from across a parking lot. By releasing it on the last weekend of the quarter — before it was ready or safe, say critics — CEO Elon Musk was able to count some of the deferred revenue, Tesla bull Ross Gerber noted to Bloomberg.

However, even after its big gain last week, Tesla shares were down slightly since the start of 2019. Ford, meanwhile, was up about 13 percent on the year.

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