NIO (NYSE: NIO) has set itself up nicely ahead of its earnings call this week after announcing last month that it had delivered a record number of cars during the second quarter. However, with an ongoing semiconductor chip shortage plaguing electric vehicle (EV) manufacturers, NIO still faces significant challenges as a player in the competitive space.
In addition, Tesla’s (NASDAQ: TSLA) expansion into China still represents a massive hurdle for NIO in its home country. Despite NIO’s record deliveries, shareholders will still want to see impressive financial results tomorrow to prove that this company is a worthy contender in the crowded non-gas-powered-vehicle market.
It’s fair to say that NIO shares have been volatile. The stock is down more than 26% over the past six months but all that could change if it reports an earnings beat this week.
So, what can Wall Street expect from NIO’s Q2 earnings?
When is NIO’s earnings date?
NIO will report its Q2 earnings report on Wednesday, 11 August at 5:00 PM Eastern Time.
How can I listen to NIO’s earnings call?
To listen to the earnings call and to access the transcript, simply visit NIO’s Investor Relations page on its website which you can find in its News & Events section. Alternatively, you can also read it and all of the company’s previous quarterly results in its Quarterly Results section too.
What to expect from NIO’s earnings
As previously mentioned, NIO had a great quarter for vehicle deliveries. On July 1, NIO released a statement that said it delivered 21,896 electric cars in Q2. This figure is over double what it produced in the year-ago period, representing a fresh quarterly record for NIO. In Q1 of 2021, the Chinese-owned company only delivered 20,060 cars so its tally for Q2 is very impressive.
These strong numbers should boost topline figures and shareholders are betting that it will help NIO boost profitability. In Q1, NIO maintained a margin for vehicles of 21.1% so Wall Street would like to see it keep this solid percentage. During the second quarter, NIO invested heavily in new stores with experts predicting that it opened 30 locations. These stores, plus enhancing their charging stations, might prove very costly and could potentially impact profitability.
NIO is expected to post revenues of RMB8.322 million ($1.283 million), up from the RMB3.719 million ($573,660) it recorded the year before. Analysts are predicting the company’s loss per share to narrow to RMB0.53 ($0.08), down from the RMB1.15 ($0.18) it posted in the same period last year. However, NIO has forecast revenues of only RMB8,146.1 ($1.26 million).
NIO was looked upon favorably by investors wanting a slice of the EV pie in China where sales of green energy cars are expected to reach 38 million by 2030. However, heightened regulatory scrutiny from the government in China has spooked investors. To combat these concerns, and any regarding its high valuation, NIO needs to post a top and bottom-line beat coupled with strong delivery guidance for the full year.
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