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Key Factors Shaping the Fate of Fisker's (FSR) Q2 Earnings

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Fisker Inc.’s (FSR - Free Report) second-quarter 2021 results are slated for an Aug 5 release, after the closing bell. This will be the third time that the electric vehicle (EV) start-up would release quarterly numbers as a public company, post its debut on NYSE on Oct 30, 2020. The company went public upon completion of its merger with Spartan Energy Acquisition, an affiliate of Apollo Global Management.

The Zacks Consensus Estimate is pegged at a loss of 22 cents per share for the quarter.

In the last reported quarter, the company reported net loss per share of 11 cents, narrower than the consensus mark of a loss of 19 cents.
The Zacks Consensus Estimate for Fisker’s second-quarter loss per share has widened by four cents over the past 90 days.

Earnings Whispers

Our proven model does not conclusively predict an earnings beat for Fisker this time around. The combination of a positive Earnings ESP, and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold), increases the odds of an earnings beat. This has been elaborated below.

Earnings ESP: Fisker has an Earnings ESP of 0.00%. This is because the Most Accurate Estimate of loss of 22 cents per share is in line with the Zacks Consensus Estimate. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Fisker currently carries a Zacks Rank of 3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Factors at Play

While California-based Fisker is set to begin production of its first vehicle, the Ocean electric SUV, in the fourth quarter of 2022, it has been drawing immense attention from investors amid the soaring popularity of green vehicles. Fisker’s manufacturing agreement with Magna (MGA - Free Report) , entered into this June, to start production of its Ocean SUV on the latter’s world-class manufacturing facility in Graz, Austria, bodes well for the quarter to be reported. In fact, during the second quarter, Fisker took considerable steps to commence production of the Ocean SUV by opening several Fisker-dedicated operational areas at Magna’s plant in Graz.

In June, Fisker announced its ambitious plan to produce what could be the world's first "climate neutral" vehicle, a car that will be built with minimum impact on the environment — spanning from how the parts and components are sourced and assembled to the way the vehicle is charged and recycled. The company plans to roll out the vehicle by 2027. This is likely to have fueled the company’s second-quarter performance.

During the June-end quarter, Fisker signed an agreement with the U.K.-based electric car subscription service, Onto, for delivery of up to 700 Ocean SUVs in 2023. The agreement, being the first multi-vehicle reservation for Fisker in the U.K. market, not only makes Onto its first customer in the U.K., but also the exclusive rental/subscription partner for 2023. This agreement raises optimism on Fisker’s future and is likely to have buoyed its quarterly performance. Encouragingly, as of May 17, Fisker had more than 16,000 reservations for the Ocean SUV, which bodes well for the quarter in discussion.

However, the company has not generated any revenues to date and its Fisker Ocean is more than a year away from production. Thus, given that the company is still in its nascent stage and will take time to capture a niche in the EV landscape, there is a lot of uncertainty surrounding its future. This might have adversely impacted the company’s quarterly performance.

Also, in 2021, the company plans to spend in the range of $240-$270 million and $210-$240 million in operating expenses and capex, respectively, to support its ramp-up plans. Such elevated spending is expected to have further dented the company’s margins for the to-be-reported quarter.

Stocks to Consider

Here are a few stocks in the auto space which are worth considering, as these have the right combination of elements to come up with an earnings beat this time around:

Fox Factory Holding Corp. (FOXF - Free Report) has an Earnings ESP of +1.15% and carries a Zacks Rank #2, at present. It is slated to report earnings results on Aug 5.
Lear Corporation (LEA - Free Report) has an Earnings ESP of +3.05% and carries a Zacks Rank of 3, currently. The company is set to announce quarterly figures on Aug 6.

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