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Key Factors to Note Ahead of Hyliion's (HYLN) Q3 Earnings

Hyliion Holdings Corporation HYLN is scheduled to release third-quarter 2021 results on Nov 9, after the bell. The Zacks Consensus Estimate is pegged at a loss of 24 cents per share for the quarter.

Hyliion went public on the NYSE on Oct 2, 2020, through a merger with Tortoise Acquisition Corporation. In the last reported quarter, this Texas-based company registered a net loss per share of 13 cents, narrower than the consensus mark of loss of 19 cents.

For the six-month period ended Jun 30, 2021, the firm’s operating expenses totaled $22.7 million, skyrocketing from the year-ago quarter’s $5,225 million.

Hyliion surpassed the Zacks Consensus Estimate in three of the trailing four quarters and missed in the other, the negative surprise being 45.68%. This is depicted in the graph below:

Hyliion Holdings Corp. Price and EPS Surprise

Hyliion Holdings Corp. price-eps-surprise | Hyliion Holdings Corp. Quote

Trend in Estimate Revisions

The Zacks Consensus Estimate for Hyliion’s third-quarter loss per share has narrowed by 3 cents in the past 90 days. Moreover, this compares favorably with the year-ago quarter’s loss of 48 cents per share.

What the Zacks Model Says

Our proven Zacks model does not conclusively predict an earnings beat for Hyliion 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. However, that is not the case here as elaborated below.

Earnings ESP: Hyliion has an Earnings ESP of 0.00%. This is because the Most Accurate Estimate is at 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: Hyliion, peers of which include American Axle AXL, Meritor MTOR and Adient Plc ADNT, currently carries a Zacks Rank of 3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Let's delve deeper into the factors that are likely to have influenced Hyliion’s third-quarter performance.

Factors to Note

Soaring popularity of green vehicles is likely to have aided the demand for fully-electric powertrain solutions, thereby boosting Hyllion's third-quarter revenues.

In July, Hyliion launched Hypertruck ERX system —  an electric powertrain offering 75 miles of all-electric range that is recharged by an onboard natural gas generator for Class 8 commercial trucks and aims to provide lower operating costs, emission reductions and superior performance. Further, in August, Hyliion received reservations for 300 Hypertruck ERX systems from Detmar Logistics. This order highlights the growing demand for Hyliion’s powertrain solutions from major fleets and logistics providers. Additionally, in August, Hyliion launched an improved hybrid powertrain solution — Hybrid eX — having increased efficiency and payload, and delivering an enhanced driver experience. The above-mentioned series of events position Hyliion well for growth and are likely to have been beneficial to the company’s quarterly performance.

However, Hyliion, which is still in the nascent stage, does not expect to generate any meaningful revenues in 2021. Further, the company’s escalating research and development (R&D) costs on advanced technologies and surging selling, general and operating (SG&A) expenses are anticipated to have dented margins to some extent during the third quarter.

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