Nio Stock Falls On Mixed Q4 Earnings Report, Chip-Shortage Warning| Investor’s Business Daily

Nio (NIO) missed Q4 estimates on the bottom line but edged past top line forecasts, and warned the global chip shortage will slow production. Nio stock fell early Tuesday.

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Nio Earnings

Estimates: Late Monday Nio, known as the Tesla (TSLA) of China, was seen narrowing its net loss to 7 cents per ADS from 39 cents a year ago as revenue soared 148% to $1.01 billion.

Results: Per-share loss of 14 cents on revenue of $1.02 billion. Gross margin improved to 17.2% in Q4 from -8.9% a year ago and  12.9% in Q3. Vehicle margin improved t0 17.2% from -6% a year ago and 14.5% in Q3. Nio’s cash balance climbed to $6.5 billion at the end of the quarter vs.$3.3 billion in Q3.

Nio had already disclosed that Q4 2020 deliveries leapt 111% to 17,353 vehicles. Sales slowed to 5,578 vehicles in February from 7,225 vehicles in January, as most Chinese businesses shut down for a week during the Lunar New Year holiday. Both months were up by triple digits vs. a year earlier. Last month, the ES6 sales led with 2,216 deliveries vs. 2,035 for the EC6 and 1,327 for the ES8.

Outlook: Nio sees Q1 deliveries of 20,000-20,500 vehicles, up 421%-434% from a year ago and up 15%-18% from Q4. Revenue is seen at $1.13 billion-$1.16 billion, up about 438%-451% from a year ago and up 11%-14% from Q4.

On a call with analysts, CEO William Li said production capacity had climbed to 10,000 vehicles a month in February from 7,500. But he warned a shortage in chips and batteries will force a slowdown back to 7,500 a month in Q2.

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Nio Stock

Shares dropped 10% to 44.79 on the stock market today. Nio stock remains under the 50-day line after a failed breakout past a 57.30 buy point, according to MarketSmith chart analysis. The relative strength line, which compares a stock’s performance vs. the S&P 500, is now below January 2021 highs.

Among other EV stocks, Li Auto (LI) fell 5.5% Tuesday. Last week, the Chinese electric-vehicle rival reported a surprise profit.

Xpeng Motors (XPEV), which reports March 8, dropped 9.3%. Tesla slipped 2.4%.

Subsidy cuts and rising competition from tech and legacy auto giants in China are also weighing on Nio stock and its EV peers. Tesla cut the price of its made-in-China Model Y, a rival to Nio’s new EC6 electric crossover.

Two versions of the much-cheaper Volkswagen (VWAGY) ID.4 are due to begin China deliveries by the end of March.

Meanwhile, Nio in January announced the ET7 electric sedan, a Tesla Model 3 rival due next year, and it plans to expand into Europe in 2021.

Find Aparna Narayanan on Twitter at @IBD_Aparna.

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