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Will Higher-Than-Expected Deliveries Boost NIO's Q4 Earnings?
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NIO Inc. (NIO - Free Report) is slated to release fourth-quarter 2023 results on Mar 5, before market open. The Zacks Consensus Estimate for the to-be-reported quarter’s loss per share and revenues is pegged at 51 cents and $2.29 billion, respectively.
The consensus estimate for NIO’s loss per share has widened by a penny in the past 60 days. Its bottom line has remained unchanged from the year-ago reported number. Revenues indicate a year-over-year decline of 1.86%.
In the last reported quarter, the company incurred a loss of 37 cents per share, narrower than the Zacks Consensus Estimate of a loss of 43 cents. The reported loss, however, was wider than the year-ago loss of 36 cents. This China-based electric vehicle maker posted revenues of $2.61 billion, which lagged the Zacks Consensus Estimate of $2.63 billion but rose 43% year over year due to higher delivery volumes.
Things to Note Ahead of Q4 Results
In the fourth quarter of 2023, NIO delivered 50,045 vehicles, which was better the company’s guided range of 47,000-49,000 vehicles. The deliveries jumped 25% year over year and surpassed our model estimate of 47,713 units. At NIO Day 2023, the company launched the ET9, a smart electric executive flagship.
We forecast fourth-quarter revenues from vehicle sales to be RMB15,082.4 million, implying growth of 2.2% on higher year-over-year deliveries. Our projection for other sales suggests year-over-year growth of 22%.
While we expect higher revenues to aid the to-be-reported quarter’s results, the high cost of goods sold is likely to have weighed on margins. In the third quarter of 2023, the cost of goods sold increased 55.7% year over year to RMB17,543.2 million. The cost of goods sold is expected to have remained elevated in the to-be-reported quarter. High SG&A and R&D expenses are also likely to have played spoilsport.
The company has been bearing the brunt of high operating expenses for the past several quarters and the trend is expected to have continued amid increasing personnel costs in research and development functions, personnel costs related to sales functions and a rise in sales and marketing activities.
Earnings Whispers
Our proven model does not conclusively predict an earnings beat for NIO for the quarter to be reported, as it does not have the right combination of the two key ingredients. A 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. That is not the case here, as elaborated below.
Earnings ESP: NIO has an Earnings ESP of 0.00%. This is because the Most Accurate Estimate is on par with the Zacks Consensus Estimate. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Lucid Group, Inc. (LCID - Free Report) incurred a loss per share of 29 cents for the fourth quarter of 2023, wider than the Zacks Consensus Estimate of a loss of 28 cents. Total revenues were $157.2 million, down 39% on a year-over-year basis. Deliveries came in at 1,734 units during the quarter. Loss from operations was $736.9 million, which narrowed from $749.7 million in the year-ago period.
R&D and SG&A expenses were $242.98 million (up 9.8% year over year) and $241 million (up 41% year over year), respectively. As of Dec 31, 2023, the company had cash and cash equivalents of $1.37 billion. Long-term borrowings were $2 billion as of Dec 31, 2023. The company expects to produce 9,000 vehicles in 2024.
Li Auto (LI - Free Report) posted earnings per share of 60 cents for the fourth quarter of 2023. Revenues from vehicle sales totaled $5.69 billion, rocketing 127.6% year over year. Revenues from other sales and services jumped 244.5% to $190.5 million. Total revenues came in at $5.88 billion, up 129.7% from the corresponding quarter of 2022. Total deliveries in the quarter were 131,805 units, skyrocketing 184.6% from the year-ago period. Vehicle margin and gross margin increased to 22.7% and 23.5%, respectively, in the quarter under review.
R&D and SG&A expenses were $491.7 million (up 63.8% year over year) and $460.5 million (up 94.9% year over year), respectively. As of Dec 31, 2023, the company had cash and cash equivalents of $12.8 billion. Long-term borrowings were $246.1 million as of Dec 31. For the first quarter of 2024, Li Auto expects deliveries within 100,000-103,000 units, implying a jump of 90.2-95.9%. Revenues are envisioned in the band of RMB31.25-32.19 billion.
Image: Bigstock
Will Higher-Than-Expected Deliveries Boost NIO's Q4 Earnings?
NIO Inc. (NIO - Free Report) is slated to release fourth-quarter 2023 results on Mar 5, before market open. The Zacks Consensus Estimate for the to-be-reported quarter’s loss per share and revenues is pegged at 51 cents and $2.29 billion, respectively.
The consensus estimate for NIO’s loss per share has widened by a penny in the past 60 days. Its bottom line has remained unchanged from the year-ago reported number. Revenues indicate a year-over-year decline of 1.86%.
In the last reported quarter, the company incurred a loss of 37 cents per share, narrower than the Zacks Consensus Estimate of a loss of 43 cents. The reported loss, however, was wider than the year-ago loss of 36 cents. This China-based electric vehicle maker posted revenues of $2.61 billion, which lagged the Zacks Consensus Estimate of $2.63 billion but rose 43% year over year due to higher delivery volumes.
Things to Note Ahead of Q4 Results
In the fourth quarter of 2023, NIO delivered 50,045 vehicles, which was better the company’s guided range of 47,000-49,000 vehicles. The deliveries jumped 25% year over year and surpassed our model estimate of 47,713 units. At NIO Day 2023, the company launched the ET9, a smart electric executive flagship.
We forecast fourth-quarter revenues from vehicle sales to be RMB15,082.4 million, implying growth of 2.2% on higher year-over-year deliveries. Our projection for other sales suggests year-over-year growth of 22%.
While we expect higher revenues to aid the to-be-reported quarter’s results, the high cost of goods sold is likely to have weighed on margins. In the third quarter of 2023, the cost of goods sold increased 55.7% year over year to RMB17,543.2 million. The cost of goods sold is expected to have remained elevated in the to-be-reported quarter. High SG&A and R&D expenses are also likely to have played spoilsport.
The company has been bearing the brunt of high operating expenses for the past several quarters and the trend is expected to have continued amid increasing personnel costs in research and development functions, personnel costs related to sales functions and a rise in sales and marketing activities.
Earnings Whispers
Our proven model does not conclusively predict an earnings beat for NIO for the quarter to be reported, as it does not have the right combination of the two key ingredients. A 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. That is not the case here, as elaborated below.
Earnings ESP: NIO has an Earnings ESP of 0.00%. This is because the Most Accurate Estimate is on par 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: It currently carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Peer Releases
Lucid Group, Inc. (LCID - Free Report) incurred a loss per share of 29 cents for the fourth quarter of 2023, wider than the Zacks Consensus Estimate of a loss of 28 cents. Total revenues were $157.2 million, down 39% on a year-over-year basis. Deliveries came in at 1,734 units during the quarter. Loss from operations was $736.9 million, which narrowed from $749.7 million in the year-ago period.
R&D and SG&A expenses were $242.98 million (up 9.8% year over year) and $241 million (up 41% year over year), respectively. As of Dec 31, 2023, the company had cash and cash equivalents of $1.37 billion. Long-term borrowings were $2 billion as of Dec 31, 2023. The company expects to produce 9,000 vehicles in 2024.
Li Auto (LI - Free Report) posted earnings per share of 60 cents for the fourth quarter of 2023. Revenues from vehicle sales totaled $5.69 billion, rocketing 127.6% year over year. Revenues from other sales and services jumped 244.5% to $190.5 million. Total revenues came in at $5.88 billion, up 129.7% from the corresponding quarter of 2022. Total deliveries in the quarter were 131,805 units, skyrocketing 184.6% from the year-ago period. Vehicle margin and gross margin increased to 22.7% and 23.5%, respectively, in the quarter under review.
R&D and SG&A expenses were $491.7 million (up 63.8% year over year) and $460.5 million (up 94.9% year over year), respectively. As of Dec 31, 2023, the company had cash and cash equivalents of $12.8 billion. Long-term borrowings were $246.1 million as of Dec 31. For the first quarter of 2024, Li Auto expects deliveries within 100,000-103,000 units, implying a jump of 90.2-95.9%. Revenues are envisioned in the band of RMB31.25-32.19 billion.
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