NEW YORK (TheStreet) -- Shares of Tesla Motors (TSLA) - Get Report were gaining on heavy trading volume late Thursday morning after the electric carmaker reported its first quarterly profit in three years and CEO Elon Musk claimed it could again post a profit in the current quarter.
For the 2016 third quarter, Tesla reported non-GAAP earnings of 71 cents per share on revenue of $2.30 billion. Analysts surveyed by Thomson Reuters had expected a loss of 54 cents per share on revenue of $1.98 billion.
But Tesla reported a $139 million benefit from the sale of Zero Emission Vehicles (ZEV) credits, which alone boosted per-share earnings by 73 cents compared to JPMorgan's estimates, the firm wrote in a note, Barron's reports. Without this benefit, Tesla would have beaten the firm's earnings expectations by just 40 cents a share rather than $1.13 per share.
"We cannot help but feel that there are some comparability issues relative to the firm's reported revenue, gross profit, and net income relative to even those analyst estimates included in consensus," the firm added.
Tesla is phasing out the majority of non-GAAP adjustments that it uses, but only some analysts accounted for this change when updating their estimates for the third quarter.
The company reported third-quarter revenue of $2.30 billion vs. JPMorgan's estimates of $1.91 billion and the consensus estimate of $1.90 billion even though the rough number of quarterly deliveries was known ahead of time, JPMorgan noted, according to Barron's.
"We feel the difference clearly relates more to the change in accounting than it does to [average selling prices]," JPMorgan said.
Separately, TheStreet Ratings team rates the stock as a "sell" with a ratings score of D+.
Tesla's weaknesses include its deteriorating net income, generally disappointing historical performance in the stock itself and feeble growth in its earnings per share.
You can view the full analysis from the report here: TSLA
TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this article's author.