Workhorse Group Stock Drops After FY23 Guidance Cut and Mixed Q2, Remains Firm On W56 Production Schedule

Workhorse Group Inc WKHS reported sales, net of returns and allowances, for the second quarter of 2023 were $3.97 million, missing the consensus of $14.9 million.

The company won purchase orders for 62 vehicles, including the first two purchase orders for the W56, and delivered 42 Class 4 (W4 CC/W750) vehicles to customers as Workhorse expands its dealer network.

The increase in sales is primarily due to the sales volume of the W4 CC vehicle in the current period.

The gross loss was $(4.46) million, and the cost of sales increased to $8.43 million from $3.02 million last year. 

The operation loss was $(23.5) million versus $(21.1) million the previous year.

EPS loss of 12 cents beat the analyst consensus of a 15-cent loss. 

The company held $62.4 million in cash and equivalents. It also remains scheduled to begin production of the all-new W56 step-van and strip chassis units in the third quarter.

Workhorse remained focused on expanding its CV dealer network. 

"Our Aerospace business is continuing to make important strides, including signing our first commercial drone purchase order and recording our first sales for HorseFly™ during the second quarter. Aero also was awarded a $900,000 follow-up grant for drone-based sensor work in Mississippi in support of the USDA," Workhorse CEO Rick Dauch said.

Outlook: WKHS cut FY23 revenue to $65 million - $85 million (prior $75 million-$125 million) versus the consensus of $78.75 million.

WKHS Price Action: WKHS shares closed lower by 6.78% at $1.10 on Tuesday.