Tesla reports 28 billion dollars in third quarter revenue and delivers its 10 millionth vehicle, while operating profit falls by more than half

Tesla's third quarter was a study in two directions at once. Revenue came in at 28.05 billion dollars, roughly flat against a year earlier, and adjusted earnings of 48 cents a share cleared analyst estimates. The company's shares had risen almost 3.5 percent in Wednesday trading ahead of the report, as of October 21.

The car business set records inside the quarter. Tesla produced 464,391 vehicles and delivered 486,532, and it built and delivered its 10 millionth vehicle since the company began. It reported record deliveries in Canada, Australia, Japan and Taiwan, and said it ended the quarter with the largest passenger vehicle backlog it has carried in four years. Energy storage deployments reached 13.7 gigawatt hours.

The software numbers moved fastest. Tesla said more than 75 percent of new vehicle deliveries in North America in the quarter included its Full Self Driving package, a jump of nearly 20 percentage points from the quarter before, and active Full Self Driving subscriptions grew 67 percent in a year to 1.74 million. Four more European countries, Croatia, Slovenia, the Czech Republic and Slovakia, have approved the system since the end of the second quarter.

Profit was the weak line. Operating income fell to 718 million dollars, down from 1.62 billion dollars a year earlier, as operating expenses rose 39 percent to 4.78 billion dollars. Research and development spending rose 69 percent to 2.76 billion dollars, driven by work on the company's Superintelligence effort, its Optimus robot and the Cybercab. Even so, the company generated 1.53 billion dollars in free cash flow and ended the quarter with 45.45 billion dollars in cash and short term investments, as of October 21.