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Tesla Motors, Inc. Earnings: Huge Guidance Directs Focus to Q4

Going into electric-car maker Tesla Motors third quarter, it was clear the focus would turn to guidance for fourth-quarter deliveries when the company shared results. Having already reported third-quarter vehicle sales, and ahead of what is supposed to be the company's biggest quarter ever (by far), shareholders were looking for Tesla to share an optimistic outlook. When it comes to guidance, Tesla undoubtedly delivered.

Model S. Image source: Tesla Motors.

But first, here's a look at Q3's key metrics
Non-GAAP revenue and EPS for the quarter were both lower than expected. On average, analysts expected non-GAAP revenue and EPS of $1.26 billion and a loss of $0.48. Instead, Tesla reported revenue and EPS of $1.24 billion and $0.58.

During the year-ago quarter, Tesla reported $932 million in non-GAAP revenue and non-GAAP EPS of $0.02.

Tesla continues to face challenges in achieving quarterly profitability. However, operating leverage has improved recently and the management said during its letter to shareholders that it "expects it to improve during the during the next several quarters." Further, it's worth noting that Tesla's operating expenses include research and development and sales expenses -- both of which should be rising rapidly ahead of Tesla's Model X production, the...