NIO Beats On Q3 Earnings, Expects Record Deliveries In Q4

NIO Inc. (NYSE:NIO) reported adjusted loss per share of 33 cents in third-quarter 2019, narrower than the Zacks Consensus Estimate of a loss of 41 cents and the prior-year quarter’s loss of $1.51. High demand for the company’s ES6 model led to improved results. Notably, total deliveries in the quarter under review were 4,799 units, suggesting an uptick from 3,268 units in the year-ago period.

Total revenues grew 25% year over year to $257 million. The figure also outpaced the Zacks Consensus Estimate of $249 million.

Competitiveness of its products and services along with sales-expansion efforts have aided the company’s third-quarter 2019 results.

NIO Inc. Price, Consensus and EPS Surprise

Q3 Highlights

In the third quarter of 2019, vehicle deliveries were 4,799, comprising 4,196 ES6s and 603 ES8s models.

Revenues from vehicle s increased 21.5% year over year to $242.5 million. Other sales grew 142.1% year over year to $14.5 million.

Cost of sales flared up 29.8% year over year to $288 million. R&D expenses of $143.2 million remained relatively unchanged year over year. SG&A expenses declined 15.6% year over year to 156.2 million.

Importantly, vehicle margin — a key metric to gauge how much a firm earns on each car it sells — was negative 6.8% in the third quarter of 2019. While it improved from negative 24% recorded in the prior quarter, it still compared unfavorably to the year-ago quarter’s vehicle margin of negative 4.3%.

Financial Position

NIO had cash and cash equivalents of $137.2 million as of Sep 30, 2019. Long-term debt was $985.6 million as of Sep 30, 2019.

The company’s cash balance is not sufficient to provide the necessary liquidity in the next 12 months for continuous operation. Currently, it is working on various financing projects, whose consummation is subject to certain uncertainties.

Outlook

NIO anticipates vehicle deliveries to be more than 8,000 units for the fourth quarter of 2019, suggesting rise of more than 66.7% from that reported in the third quarter of 2019. With that, aggregate deliveries are anticipated to reach more than 20,300 in 2019.

Moreover, NIO expects total revenues of $393.2 million for the fourth quarter of 2019, suggesting an increase of 53% from that reported in the third quarter of 2019

Zacks Rank & Stocks to Consider

Currently, NIO has a Zacks Rank #3 (Hold).

A few better-ranked stocks in the Auto-Tires-Trucks sector are Weichai Power Co. (OTC:WEICY) , Spartan Motors, Inc (NASDAQ:SPAR) and SPX Corporation (NYSE:SPXC) . While Weichai Power flaunts a Zacks Rank #1 (Strong Buy) at present, Spartan Motors and SPX carry a Zacks Rank of 2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Weichai Power has a projected earnings growth rate of 6.1% for the current year. Its shares have gained 82.7% over the past year.

Spartan Motors has an estimated earnings growth rate of 85.4% for the ongoing year. The company’s shares have surged 149.9% in a year.

SPX has an expected earnings growth rate of 23.6% for 2019. The company’s shares have surged 81.2% in the past year.

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