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NIO's Record Delivery Count Raises Optimism for Q3 Earnings

NIO Inc. NIO is slated to release third-quarter 2020 results on Nov 17, after the closing bell. This China-based electric vehicle (EV) maker’s quarterly results are likely to reflect the favorable impact of rising demand for the ES6 model, the company’s 5-seater high-performance premium smart electric SUV, which forms a major chunk of the automaker’s overall deliveries.

(Also read: NIO Warming Up to Q3 Earnings: What Can Investors Expect?)

Second-Quarter Highlights

In the last reported quarter, NIO incurred a loss of 15 cents per share on revenues of $526.4 million. Cash and cash equivalents totaled $1.5 billion as of Jun 30, 2020.

The company delivered 10,331 vehicles in the second quarter of 2020 including 8,068 ES6s and 2,263 ES8s, marking a rise of 190.7% year over year. This upside was owing to stabilization of the pandemic in China, which led to rebound in sales during the June quarter.

NIO Sets New Record for Q3 Deliveries

With the economy gradually recovering from the mayhem caused by the coronavirus pandemic and China’s auto market finally being out of the woods, NIO has been benefiting from higher sales in the country.

The company’s strong vehicle delivery count is likely to have driven the company’s sales during the to-be-reported quarter. Notably, this Shanghai-based EV maker delivered 12,206 vehicles in the September quarter, exceeding the upper-end of the company’s guidance and also skyrocketing 154.3% year over year.

Soaring demand for the ES6 model is expected to have buoyed the company’s third-quarter revenues, thereby boosting investors’ confidence. Markedly, this electric vehicle startup delivered 4,708 vehicles in September alone, setting a new monthly record. The reported figure reflected a whopping rise of 133.2% year over year, comprising 3,210 ES6s, 1,428 ES8s, the company’s 6-seater and 7 seater electric-SUV, and 16 EC6s, the company’s 5-seater premium electric coupe SUV.

While surging deliveries are likely to have aided NIO’s top line, escalating research and development, and selling, general and administration costs might have hurt its operating profits in the September quarter. In fact, the company’s operational inefficiency was under pressure over the last several quarters, a trend that most likely continued in the quarter to be reported as well.

Earnings & Revenue Projections for Q3

The Zacks Consensus Estimate for the to-be-reported quarter’s loss is pegged at 15 cents a share, narrower than the loss of 33 cents incurred in the prior-year quarter. The Zacks Consensus Estimate for revenues of $628 million indicates 144.4% growth from the year-ago reported figure.
Our proven model does not conclusively predict an earnings beat for NIO this time around, which carries a Zacks Rank #3 (Hold) at present and an ESP of 0.00%. The combination of a positive Earnings ESP and a Zacks Rank #1, 2 (Buy) or 3 increases the odds of a positive surprise. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

But that is not the case here as shown above. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Reportedly, both the red hot EV maker Tesla TSLA and the auto giant General Motors GM delivered an earnings beat in their respective quarterly releases. Meanwhile, electric-truck startup Nikola NKLA reported narrower-than-expected loss in its third-quarter results.

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