Tesla’s Q3 profit drops as it prepares for possible merger with SpaceX

Tesla reported a decline in profit for the latest quarter, but a measure of cash its business generated surged, leaving investors with a mixed picture as it prepares for a possible merger with Elon Musk’s other big company, SpaceX.

The electric vehicle maker reported third-quarter net income of US$787 million, or 22 cents per share, down 44 per cent from the year-earlier period. Excluding certain items, though, earnings per share of 48 cents beat Wall Street analyst expectations by 3 cents.

One standout for the quarter was Tesla’s US$1.5 billion in free cash flow, a measure of cash generated after subtracting investments needed to keep the business running. Given big artificial intelligence spending, analysts had expected Tesla would report that it had burned through cash, not generated it.