Nikola Shares Higher Despite Weaker-Than-Expected Q3 Earnings: What's Going On?

Nikola Corp NKLA reported Q3 FY23 sales of $(1.73) million, vs. $24.2 million a year ago, significantly missing the consensus of $13.3 million.

Nikola didn't produce any trucks in Q3, vs. 75 last year. It shipped 3 trucks, down from 63 in the same period in 2022.

Nikola said, to date, 35 customers have placed orders for over 277 hydrogen fuel cell electric trucks. The company specified that it received purchase orders for 47 battery-electric trucks from one dealer despite the truck being in recall.

The company's gross loss was $(125.5) million versus $(30.2) million a year ago. Adjusted EBITDA loss expanded to $(188.6) million from $(107.9) million a year ago. Adjusted EPS loss of $(0.30) missed the consensus loss of $(0.14).

NKLA's net cash used in operating activities during nine months was $(378.4) million versus $(431.5) million a year ago. The company held $364 million in cash and equivalents.

"We think the competition is well behind us and believe there is white space for us to capture market share with the introduction of the Advanced Clean Fleets Rule, and incentives like HVIP and ISEF offering up to $288,000 and $408,000, respectively, per hydrogen fuel cell electric truck in California," said Nikola CEO Steve Girsky. 

Nikola expects higher cost related to truck recall that will increase required capital to achieve profitability in 2025, as per Reuters. 

Last month, the company celebrated the commercial launch of the Nikola hydrogen fuel cell electric vehicle at its manufacturing facility with production line tours and technology Q&As with Nikola engineers on hydrogen safety, the HYLA ecosystem and the Nikola human machine interface system.

Related: Nikola Unveils 500-Mile Range Hydrogen Truck — CEO Says, Focused On 'Securing Our Position' As Pioneers

Last week, in a new regulatory filing, Nikola said an arbitration panel awarded the company approximately $165 million plus interest in an arbitration proceeding with the company's founder and former executive chairman Trevor Milton. 

Price Action: NKLA shares are trading higher by 8.56% at $1.14 on the last check Thursday.