Investors have read this story before.
NIO
(tick: NIO) reported a loss of 25 cents on $1.54 billion in sales. Wall Street had expected a second-quarter loss of 18 cents per share on sales of $1.42 billion. In the first quarter, the company lost 12 cents per share on sales of $1.56 billion.
Sales were better than expected, but guidance for the third quarter was low. The company expects to deliver about 32,000 vehicles in the third quarter. This implies September deliveries of approximately 11,000 units. NIO has delivered nearly 21,000 vehicles in the first two months of the quarter.
Analysts had expected about 37,000 vehicle sales, including about 17,000 in September. 17,000 deliveries would be a record for NIO.
Sales for the third quarter had been forecast to come in at just under $2 billion. Analysts are forecasting about $2.4 billion in sales for the current quarter.
NIO stock fell nearly 6% in premarket trading.
S&P 500
and
Dow Jones Industrial Average
Futures rose about 0.2% and 0.1%, respectively.
NIO’s quarter was very similar to peers
Li Auto
(LI) and
XPeng
(XPEV). Both have already reported Q2 numbers. Both ended up with third-quarter numbers below Wall Street estimates.
Li expects to deliver about 28,000 vehicles in the third quarter. In terms of earnings, Wall Street was looking for about 39,000 points. The company delivered nearly 29,000 in the second quarter.
XPeng
expects to deliver about 30,000 vehicles in the third quarter. On the earnings side, Wall Street was looking for about 45,000 points. The company delivered about 34,000 vehicles in the second quarter. Investors, obviously, prefer to see sequential growth.
Investors could have used some good news from NIO on Wednesday. NIO’s American depositary receipts, or ADRs, are down about 45% this year and fell about 15% last month. Rising interest rates, rising tensions between the US and China, and rising EV battery costs contributed to the decline in ADRs.
Management is hosting a conference call at 8 a.m. eastern time to discuss the results.
In the call, investors can look for an update on how individual models will be sold, capacity expansion as well as the results of an internal investigation into NIO’s accounting. A retailer recently questioned how NIO accounts for its battery as a service business. NIO will allow car buyers to essentially buy an EV without the batteries. This reduces the initial cost. Buyers then pay a monthly fee for the batteries.
Options markets suggest that ADRs will move about 6%, up or down, after earnings – similar to the volatility of the last four quarterly reports, and ADRs declined after each of those four reports.
Write to Al Root at allen.root@dowjones.com
