NEW YORK ( TheStreet) -- Tesla (TSLA - Get Report) is back in the spotlight. The company has turned profitable for the first time and market chatter is focusing on talks with Google (GOOG) to develop self-driving cars.
Tesla's first-quarter profits came in at $15 million (with some items excluded), as sales of the Model S sedan surprised to the upside. At 12 cents per share, the results were much stronger than the 4 cents expected by Wall Street.
But the real story is the relative performance when looking at the same period last year. First-quarter results in 2012 showed a per-share loss of 76 cents, so the main story here is the massive earnings improvement and the company's turn toward profitability.
Stronger SalesThe improved performance at the 10-year-old Silicon Valley startup was driven by increased production and sales of its second vehicle, the Model S, which is the company's first mass-produced offering. During the first quarter, Tesla sold and delivered more than 98% of the Model S sedans it produced. This helped push revenue to $562 million for the period (an 83% improvement from fourth-quarter 2012). In addition to sales of the Model S, Tesla saw increased revenue from sales of battery packs and electric power trains to Toyota (TM) and revenue from alternative vehicle development with Mercedes-Benz.
The zero-emission vehicle tax credit from the state of California added $68 million to Tesla's quarterly revenue (12% of the total figure). Overall, the improved efficiency of Tesla's sales plan is what generated the positive earnings surprise in a trend that the company expects to continue going forward. More attention has been generated by Tesla's recent talks with Google. Most of the buzz suggests the market is looking for these companies to combine their forward-looking ideas and work together in creating the next phase in the evolution of automotive transport. At the upper levels, Tesla has been vocal about its belief that technology can drive a car safely and without human aid.