Adjusted for one-time items, Tesla earned $2.18 a share, swinging from an adjusted loss of $1.12 a share a year ago. Sales fell 5% to $6.04 billion from $6.35 billion a year ago.

Analysts polled by FactSet expected an adjusted loss of 2 cents a share on sales of $5.15 billion.

The numbers were “very strong,” setting Tesla for S&P 500 index inclusion, said Alyssa Altman, an auto-industry consultant with Publicis Sapient.

“Tesla is showing the market they move fast, make quick decisions and are not afraid of failure,” she said. “They made bold choices to reduce costs while still launching a new model with all the challenges that go with a new model launch. In doing that, they are seeing success and confidence from the market. Any profit in this environment is good and shows resilience in uncertain times.”

The “real news,” said Gene Munster of Loup Ventures, “is Tesla hit profitable and free cash flow with sustainable measures. The company did not pull a one-time lever to get to profitability.”

In a letter to investors, Tesla said its progress in the first half of the year “has positioned us for a successful second half of 2020. Production output of our existing facilities continues to improve to meet demand, and we are adding more capacity.”

Tesla did not provide an outlook for 2020, saying it was still “difficult” to predict shutdowns and shifts in consumer sentiment for the second half of the year.

As it had done in its first-quarter shareholder letter, Tesla did not address the ongoing pandemic directly, with the word appearing only on standard legal disclosures at the very end of the document.

It also kept its 2020 goals unchanged from its first-quarter letter, mentioning again “capacity” to achieve the milestone of selling more than half a million vehicles in the year.

“We have the capacity installed to exceed 500,000 vehicle deliveries this year, despite recent production interruptions. While achieving this goal has become more difficult, delivering half a million vehicles in 2020 remains our target,” it said in the letter.

It has enough liquidity is enough to fund production and long-term capacity expansion plans, it said.

The company said it continues to build capacity for the Model Y, its compact SUV, at factories in Berlin and Shanghai, and it remains on track to start Model Y sales from both locations in 2021. Tesla Semi, the company’s long-haul electric truck, is also slated for 2021.

In the call with analysts, Tesla’s Chief Executive Elon Musk said the Austin, Texas, area had been selected as the next U.S. “gigafactory” site, and preparations are underway, he said.

Before Wednesday, the Silicon Valley car maker had reported three consecutive quarters of GAAP and adjusted profit. That fourth consecutive quarterly profit opens up the possibility of joining the S&P 500 index within a few months.

Tesla pinned the surprise profit on “fundamental operational improvements,” with costs with factory shutdowns offset by cost-cutting measures. GAAP operating margin reached nearly 5%, the company said, adding it expects it to continue “to grow over time, ultimately reaching industry-leading levels.”

Tesla earlier this month reported second-quarter sales that crushed Wall Street expectations, even as its sole U.S. car-making factory was shuttered for most of the quarter under local shelter-in-place orders.

The sales surge was one of the recent catalysts for the stock rally, which has pushed Tesla’s market valuation around $300 billion, about $95 billion ahead of Japan’s Toyota Motor Corp. TM, -0.00% and the No. 1 car maker in the world by market value. The shares ended at a record $1,643 on Monday, and hit an intraday record of $1.794.99 on July 13.

In April, Tesla also surprised investors by posting a first-quarter profit. Musk kept the surprises going on a post-results call with analysts, veering off script to condemn the closures put in place to curb the spread of the virus and likening them to fascism.

Musk also ignited Twitter and legal spats that prompted President Donald Trump to chime in on the factory closure.

Tesla’s Fremont, Calif., factory reopened in May in defiance of local shutdown orders. The standoff was eventually resolved, with Tesla reopening the plant after filing a health and safety plan with local authorities.

See also:Tesla stock is ‘overheated;’ remain cautious despite hype, BofA analysts say

Earlier Wednesday, analysts at Bank of America Securities kept their cautious stance on Tesla, saying that the stock was overheated and urging investors to “remain cautious despite hype and momentum.”

The analysts increased their price target on the shares to $800, from $500, but kept their equivalent of a sell rating. The mean price target on Tesla from 31 analysts polled by FactSet is $912, with the top of the range being above $1,500.

Tesla shares have gained nearly 300% this year, comparing with gains around 1% for the S&P 500 index SPX, +0.57% and contrasting with a loss around 6% for the Dow Jones Industrial Average DJIA, +0.61% .