Tesla reports surprise profit in 'truly historic' quarter

Elon Musk announces a Tesla project in Australia in September 2017.Getty Images

Tesla will report third-quarter earnings Wednesday afternoon.
Musk has previously said the company could be cash flow positive this quarter.
All eyes will be on the Model 3's average selling price, a major component of the company's profitability.

Tesla is scheduled to report its third quarter earnings after the closing bell Wednesday, one week earlier than originally expected.

Here's what Wall Street analysts are expecting:

Adjusted earnings: -$0.15 per share
Revenue: $6.315 billion

All eyes will be on the EPS line when the numbers are released. CEO Elon Musk said in April that Tesla will become free cash flow positive by Q3 and Q4.

With its all-hands-on-deck rush to finish the quarter strong and "abnormally high" Model 3 pricing could drive a temporary profit, one bearish analyst told clients ahead of the earnings report.

"If they aren't profitable, it's a problem," UBS analyst Colin Langan said in a note. "If Tesla is unable to report a profit in Q3 & Q4 with ASPs (average selling prices) ~$60k, we struggle to understand how they will be profitable when ASPs normalize at ~$45k."

Langan's price target for Tesla is $190, much lower than Wall Street's average price target of $301 — roughly in line with the stock's price Wednesday afternoon.

Shares of Tesla had sank from previous highs on Wednesday, and were trading up about 0.4% Wednesday afternoon. Options pricing was implying a move of 7% in either direction following the earnings report, according to data from Bloomberg.

Short sellers, or those investors betting against Tesla's stock price, had increased their bets ahead of the report, with nearly $10 billion riding against the stock.

Check back after markets close for Tesla's full earnings report.

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