Nio (NIO) missed fourth quarter estimates at the bottom line, but exceeded the top line forecasts after the Chinese electric vehicle rival Li Auto (LI) reported a surprise profit last week. Nio’s shares fell late.
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Nio’s earnings
Estimates: Monday afternoon Nio, known as the Tesla (TSLA) of China, is likely to reduce the net loss to 7 cents per ADS from 39 cents a year ago, as revenue increased 148% to $ 1.01 billion.
Results of: Loss per share of 14 cents on revenue of $ 1.02 billion. Nio has already reported that fourth quarter 2020 deliveries jumped 111% to 17,353 vehicles, growing for the third consecutive quarter after the pandemic in early 2020. Its new sporty, youth-oriented EC6 luxury electric crossover outperformed two older electric SUVs – the ES8 and ES6 – in December. Sales momentum slowed to 5,578 vehicles in February, from 5,578 vehicles in January.
Meanwhile, Nio announced in January the ET7 electric sedan, a rival Tesla Model 3 scheduled for launch next year, and plans to expand to Europe in 2021. As Nio expands, Wall Street will watch the impact on margins and production costs. Gross margin improved to 17.2% in the fourth quarter, from 8.9% in the previous year and 12.9% in the third quarter. The vehicle margin improved to 17.2% from 6% a year ago and 14.5% in the third quarter.
Nio’s cash balance rose to $ 6.5 billion at the end of the quarter against $ 3.3 billion in the third quarter.
Panorama: Nio sees deliveries in the first quarter of 20,000-20,500 vehicles, an increase of 421% -434% over the previous year and an increase of 15% -18% over the fourth quarter. Revenue is estimated at $ 1.13 billion – $ 1.16 billion.
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Nio Stock
The shares fell 3.4% at the end, after closing at a high of 8.7% at 49.76 in Monday’s trading. Nio’s shares remain below the 50-day line after an unsuccessful break after a 57.30 point of purchase, according to analysis by the MarketSmith chart. The relative strength line, which compares a stock’s performance with the S&P 500, for Nio’s shares increased in 2019 and 2020, but is now below the January 2021 highs.
Among other EV shares, Li Auto gained 1.9% on Monday and Xpeng Motors (XPEV), which reports March 8, rose 4.1%. Tesla added 6.4%.
Workhorse Group (WKHS) reversed upwards to end at 7.2%, despite a much larger than expected quarterly loss of 78 cents per share. The lost earnings increased after the truck manufacturer EV lost a major contract to make a new generation of USPS mail delivery trucks.
Subsidy cuts and growing competition from tech giants and legacy automobiles in China are also weighing on the shares of Nio and its EV peers. Tesla cut the price of its China-made Y model, a rival to Nio’s new EC6 electric crossover. Meanwhile, the global chip shortages may also weigh on EV inventories.
Find Aparna Narayanan on Twitter at @IBD_Aparna.
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