Chinese electric vehicle maker
XPeng
reported better-than-expected third-quarter earnings. Fourth-quarter guidance looks solid, too. Shares were weak in early trading, however. The good news wasn’t enough to give the stock an early boost considering its starting point.
XPeng
(ticker: XPEV) announced an adjusted loss of $380 million from sales of $1.2 billion on Wednesday morning. Wall Street was looking for a $400 million loss and sales of $1.1 billion, respectively.
XPeng delivered 40,008 cars in the third quarter, up from 23,205 delivered in the second quarter and 29,570 delivered in the third quarter of 2022.
“XPeng vehicle deliveries have grown for nine consecutive months and our free cash flow has substantially improved,” said co-president Brian Gu in a news release. “Our new products and technology-driven cost controls are expected to result in notable improvements to our gross margin. Leveraging these strengths, we expect even stronger free cash flow in the fourth quarter, marking the starting point of our journey towards long-term scalable profitability.”
The company’s third-quarter gross profit margin was still negative at minus 2.7%, but it improved more than one percentage point compared with the second quarter.
More sales will help margins improve. Looking ahead, XPeng expects to deliver between 59,500 and 63,500 units in the fourth quarter. Wall Street is projecting about 54,300 units. Sales are expected to fall between $1.8 billion and $1.9 billion. Analysts are projecting about $1.7 billion.
XPeng stock was down 1.9% in premarket trading while
S&P 500
and
Nasdaq Composite
futures were up 0.3% and 0.5%, respectively.
A falling stock with solid results and guidance might be a surprise for investors, but XPeng shares are up about 6% over the past three months and up about 88% over the past 12 months.
The performance over the past three months is notable because it has been a difficult period for EV-related stocks as investors have fretted about a slowdown in EV sales.
NIO
(
NIO
) shares are down about 36% over the past three months. Shares of EV charging company
ChargePoint
(CHPT) are off about 57%.
Management hosts a conference call at 8 a.m. Eastern time to discuss results. Analysts and investors will want to hear more about EV demand in China in the fourth quarter and beyond.
The company ended the quarter with about $5 billion in cash on its books.
Write to Al Root at [email protected]
Read the full article here
