By Tomi Kilgore and claudia assis
Q4 sales seen between 16,500 and 17,000 vehicles
Nio Inc.'s U.S.-listed shares lost more than 2% Wednesday, after the Shanghai-based electric-car maker reported better-than-expected quarterly results but margins disappointed.
Nio's (NIO) American depositary receipts fell after results were reported after Tuesday's close, with the stock dropping as much as 8.8% before bouncing to end the after-hours session down about 1.1%. For the year, the ADRs have gained more than 1,000%, which could help explain their lackluster performance after the narrower-than-expected quarterly loss.
Nio late Tuesday said it lost RMB1.047 billion ($154.2 million), or 14 cents per ADR, in the third quarter, which compared with a loss of RMB2.52 billion in the year-ago period.
Excluding non-recurring items, such as stock-based compensation expenses, Nio's adjusted net loss came in at $147 million, or 12 cents per ADR, the company said.
Analysts polled by FactSet expected a net loss of 20 cents per ADR for the quarter.
Revenue rose 146% to RMB4.526 billion, or $666.6 million, the company said. The FactSet consensus called for revenue of $664 million. Sales guidance for the fourth quarter was also above expectations.
Nio said it delivered 12,206 vehicles in the third quarter, including 8,660 ES6 models. It compared with 4,799 vehicles delivered in the third quarter of 2019 and 10,331 vehicles delivered in the second quarter of 2020, the company said.
"In view of the growing market demand for our competitive products, we are motivated to continuously elevate the production capacity to the next level," founder and Chief Executive William Bin Li said in a statement. "We expect to deliver 16,500 to 17,000 vehicles in the coming fourth quarter."
Nio said its vehicle margin rose to 14.5%; gross margins were at 12.9%. Analysts at Deutsche Bank had expected gross margins around 14.9%.
Nio's delivery outlook was "materially" ahead of consensus and the company's supply constraints "appear to be less of an issue than we had expected with capacity ramping up faster than anticipated," the Deutsche Bank analysts said in a note Wednesday.
Besides the delivery outlook, the company also guided for fourth-quarter revenue between RMB6.258 billion ($921.8 million) and RMB6.435 billion ($947.9 million), which would represent an increase of about 119.7% to 126% from the fourth quarter of 2019. The analysts surveyed by FactSet expect a fourth-quarter revenue around $813 million.
Nio did not directly address the impacts of the coronavirus pandemic on its business.
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On the days of the previous eight quarterly reports since Nio went public in September 2018, the stock had dropped six times, by an average loss of 13.1%. The two times the stock gained included a 3.6% rise after first-quarter 2019 results and a 53.7% gain after third-quarter 2019 results.
Nio's stock has skyrocketed 1,033.83% year to date through Monday, while shares of U.S.-based EV rival Tesla Inc.'s stock (TSLA) has hiked up 387.8%. Meanwhile, the S&P 500 index has advanced 12.3% this year.
"While we certainly could see volatility/corrections depending on EV sentiment moving forward and fund flows ... we believe Nio will continue to take share in the premium segment from traditional ICE incumbents," the Deutsche Bank analysts said.
The company is poised to emerge "a major winner in the China auto market by the middle of the decade. This sets up NIO to be a must-own stock for growth-oriented and ESG investors, in our view," the analysts said.
-Tomi Kilgore and claudia assis; 415-439-6400; AskNewswires@dowjones.com
(END) Dow Jones Newswires
November 18, 2020 13:32 ET (18:32 GMT)
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