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Will High SG&A Offset NIO's Delivery Growth in Q4 Earnings?
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NIO (NIO - Free Report) is set to release fourth-quarter 2023 results on Mar 5, before market open. The results will primarily center around the company’s vehicle deliveries. While fourth-quarter deliveries perform well and beat our model estimates, rising expenses might act as a spoiler.
Before we delve into the factors that are set to shape its upcoming results, here’s a snapshot of its third-quarter 2023 earnings report.
NIO incurred a loss per share of 37 cents, wider than the year-ago loss of 36 cents. However, the loss per share was narrower than the Zacks Consensus Estimate of a loss of 43 cents. Total revenues came in at $2.61 billion, witnessing year-over-year growth of 43% on higher delivery volumes. The top line, however, fell short of the Zacks Consensus Estimate of $2.63 billion.
NIO’s third-quarter deliveries totaled 55,432 units (37,585 premium smart electric SUVs and 17,847 premium smart electric sedans), up 75% year over year.
NIO had cash/cash equivalents of $3.3 billion as of Sep 30, 2023. Long-term borrowings totaled $1.67 billion, up from $1.58 billion as of Dec 31, 2022.
Delivery Growth to Aid Q4 Results, Rising Expenses to Ail
China’s intense push for EV vehicles is a significant boost for NIO. ES6, ES7, ES8, EC6, EL7, ET5, ET7 and EC7 models are driving the firm’s deliveries. NIO reported deliveries of 50,045 units during the fourth quarter. The delivery numbers rose 25% on a yearly basis. Additionally, it exceeded our model projection of 47,713 units.
Deliveries comprised 12,048 premium smart electric SUVs and 5,964 premium smart electric sedans in the fourth quarter of 2023, representing an increase of 76% and a decrease of 33.5%, respectively, on a year-over-year basis. We estimate vehicle sales for the fourth quarter of 2023 at RMB15.1 million, implying an uptick of 2.2% year over year.
On the flip side, NIO has been struggling with high selling, general and administrative (SG&A) expenses due to the increase in personnel costs related to sales functions and a rise in sales and marketing activities. For the fourth quarter of 2023, our model estimates suggest a year-over-year increase of 18.6% in SG&A expenses.
Overall Earnings & Revenue Projections
Our proven model does not conclusively predict an earnings beat for NIO as it doesn’t have the right combination of a positive Earnings ESP and a favorable Zacks Rank. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
The Zacks Consensus Estimate for the to-be-reported quarter’s loss is pegged at 51 cents per share, which remained unchanged from year-ago reported figure. The Zacks Consensus Estimate for loss per share has widened by a penny over the past 60 days. The Zacks Consensus Estimate of $2.29 billion for sales indicates a 1.9% decline on a year-over-year basis.
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, 2023. 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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Will High SG&A Offset NIO's Delivery Growth in Q4 Earnings?
NIO (NIO - Free Report) is set to release fourth-quarter 2023 results on Mar 5, before market open. The results will primarily center around the company’s vehicle deliveries. While fourth-quarter deliveries perform well and beat our model estimates, rising expenses might act as a spoiler.
Before we delve into the factors that are set to shape its upcoming results, here’s a snapshot of its third-quarter 2023 earnings report.
(Also read: Will Higher-Than-Expected Deliveries Boost NIO's Q4 Earnings?)
Q3 Highlight
NIO incurred a loss per share of 37 cents, wider than the year-ago loss of 36 cents. However, the loss per share was narrower than the Zacks Consensus Estimate of a loss of 43 cents. Total revenues came in at $2.61 billion, witnessing year-over-year growth of 43% on higher delivery volumes. The top line, however, fell short of the Zacks Consensus Estimate of $2.63 billion.
NIO’s third-quarter deliveries totaled 55,432 units (37,585 premium smart electric SUVs and 17,847 premium smart electric sedans), up 75% year over year.
NIO had cash/cash equivalents of $3.3 billion as of Sep 30, 2023. Long-term borrowings totaled $1.67 billion, up from $1.58 billion as of Dec 31, 2022.
Delivery Growth to Aid Q4 Results, Rising Expenses to Ail
China’s intense push for EV vehicles is a significant boost for NIO. ES6, ES7, ES8, EC6, EL7, ET5, ET7 and EC7 models are driving the firm’s deliveries. NIO reported deliveries of 50,045 units during the fourth quarter. The delivery numbers rose 25% on a yearly basis. Additionally, it exceeded our model projection of 47,713 units.
Deliveries comprised 12,048 premium smart electric SUVs and 5,964 premium smart electric sedans in the fourth quarter of 2023, representing an increase of 76% and a decrease of 33.5%, respectively, on a year-over-year basis. We estimate vehicle sales for the fourth quarter of 2023 at RMB15.1 million, implying an uptick of 2.2% year over year.
On the flip side, NIO has been struggling with high selling, general and administrative (SG&A) expenses due to the increase in personnel costs related to sales functions and a rise in sales and marketing activities. For the fourth quarter of 2023, our model estimates suggest a year-over-year increase of 18.6% in SG&A expenses.
Overall Earnings & Revenue Projections
Our proven model does not conclusively predict an earnings beat for NIO as it doesn’t have the right combination of a positive Earnings ESP and a favorable Zacks Rank. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
The company has an Earnings ESP of 0.00% and carries a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for the to-be-reported quarter’s loss is pegged at 51 cents per share, which remained unchanged from year-ago reported figure. The Zacks Consensus Estimate for loss per share has widened by a penny over the past 60 days. The Zacks Consensus Estimate of $2.29 billion for sales indicates a 1.9% decline on a year-over-year basis.
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, 2023. 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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