Nio Stock Dips After Q2 Results Trail Estimates, EV Maker Eyes Q3 Rebound In Deliveries And Sales

Chinese electric vehicle startup Nio, Inc. NIO reported Tuesday ahead of the market open second-quarter revenue and bottom line results that trailed the consensus forecast, reflecting a decline in vehicle sales and margin contraction amid a tough pricing environment. Looking ahead, the company guided to strong growth in deliveries and revenue for the third quarter.

In premarket trading, the stock was down 2.36% at $31,041, according to Benzinga Pro data.

Nio’s Key Q2 Numbers: The Shanghai, China-based company reported second-quarter revenue of 8.77 billion yuan ($1.21 billion), down 14.8% year-over-year and 17.8% lower than in the previous quarter. Analysts, on average, estimated revenue of $1.26 billion for the quarter.

Vehicle deliveries fell to 23,520 units, down from 25,059 units in the second quarter of 2022 and 31,041 units in the first quarter of 2023. Consequently, vehicle revenue declined 24.9% year-over-year and 22.1% quarter-over-quarter.

The Chinese economy is going through a tepid phase as it has not recovered well even after the reopening in late 2022.

Excluding share-based compensation expenses, the company reported a non-GAAP loss of 3.28 yuan ($0.45) compared to a loss of 1.34 yuan in the year-ago quarter and 2.51 yuan in the first quarter of 2023. Analyst had called for a narrower loss of $0.41 per share.

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Gross margin contracted to 1.0%, down from the year ago’s 13% and the previous quarter’s 1.5%, as vehicle margin declined from 16.7% a year ago to 6.2% due to changes in product mix, Decreased battery cost per unit, however, had an offsetting impact. 

Cash and cash equivalents, restricted cash, short-term investment, and long-term time deposits were 31.5 billion yuan ($4.3 billion) as of June 30, 2023.

Nio’s Forward Outlook: The company guided to deliveries of 55,000 to 57,000 units for the third quarter, up 74%-80.3% from the year-ago quarter. The company expects third-quarter revenue of $2.61 billion to $2.69 billion, representing 45-50% year-over-year growth.

“Attributed to the product transition based on the NT2.0 Platform, coupled with the expansion of our power network and the strengthening of our sales capabilities, we expect a solid growth in vehicle deliveries in the second half of 2023,” said Chairman and CEO William Li.

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