Chinese EV maker
NIO
reported a narrower-than-expected adjusted loss in its fiscal first quarter. Overall results were just OK, but it looks as if things are better than investors feared.
NIO (ticker: NIO) reported an adjusted per share loss of 36 cents from sales of $1.6 billion. Wall Street was looking for a loss of 39 cents a share on sales of $1.7 billion. A year ago, the company reported a loss of 12 cents a share from $1.5 billion in sales.
Overall gross profit margins came in a 1.5% for the first quarter, down from 3.9% reported in the fourth quarter, and down from 14.6% a year ago.
The numbers weren’t too different than what analysts expected, but there isn’t a lot of growth or strong profitability to write home about.
“In the face of the changing market environment, we will observe and analyze the dynamics of the operating environment and competition landscape promptly, and continue to strengthen our competitive advantages in an agile and efficient manner,” said Steven Wei Feng, NIO’s chief financial officer, in a news release. “Meanwhile, we will stay focused on execution, optimize cost structure, and further improve our operating efficiency.”
Shares were up 7.3% at $8.36 in midday trading, recovering from earlier losses. The
S&P 500
is up 0.6% while the
Nasdaq Composite
has gained 1%.
Deutsche Bank analyst Edison Yu and Mizuho analyst Vijay Rakesh wrote in earnings previews that they were expecting a weak quarter. Things appear to be a little better than expected.
NIO expects to deliver 10,000 to 12,000 vehicles in June, up from 6,155 vehicles delivered in May. June will put second-quarter deliveries at roughly 23,000 to 25,000 units, down from 31,041 delivered in the first quarter of 2023.
In a Friday report, Deutsche Bank’s Yu called Q1 results “soft,” adding operating costs were under control and the delivery outlook was “better than feared.”
New models are helping. “With the volume ramp-up of our new models including the All-New ES6, our teams are well prepared for a solid growth in vehicle deliveries,” added CEO William Bin Li in the press release. The ES6 SUV was launched in May.
Coming into Friday trading, NIO stock has declined about 59% over the past 12 months. Rising competition, falling EV prices, and slowing sales growth have sapped some investor enthusiasm for the stock.
Write to Al Root at [email protected]
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