Tesla profits drop but top analyst estimates

Tesla reported a drop in third-quarter profits on Wednesday but topped analyst estimates as multi-billionaire Elon Musk's electric vehicle maker invested heavily in new technologies. Texas-based Tesla reported profits of US$787 million, down 42.7 percent from the year-ago period. Besides marginally lower car sales, Tesla saw a drop in revenues from regulatory credits and energy and storage, while spending on research and development jumped. Revenues were essentially flat at US$28 billion. "We continue to invest in the future through R&D and Capex spend across our businesses, including SI, robotics and energy," said Tesla, referring to the Trump administration's favoured term, "Super Intelligence" instead of artificial intelligence. "Much hard work lies ahead, but we are as optimistic as ever," the company added in the earnings release. The results follow Musk's disclosure on Tuesday that special committees of independent directors at both SpaceX and Tesla have been set up to discuss a merger of the two companies. Analysts had been cautious about Tesla's third-quarter financial performance heading into Wednesday's release. While third-quarter auto sales topped estimates due in part to an uptick in European markets amid high petrol prices, better sales have not always translated into a lift into Tesla's bottom line. Also impactful, capital spending more than doubled to US$4.7...