Shares of Nio rocketed on heavy volume Monday, enough to pace major stock gainers, after the China-based electric-vehicle maker reported a third-quarter loss that narrowed more than expected, as revenue and vehicle deliveries surged, helping to provide an upbeat outlook for the current quarter.
Nio Inc. NIO, +41.94% reported a net loss for the quarter to Sept. 30 of 2.52 billion renminbi ($352.8 million), or RMB2.48 per ordinary share, after a loss of RMB9.76 billion, or RMB42.59 a share, in the same period a year ago.
Excluding nonrecurring items, such as share-based compensation expenses and accretion on redeemable non-controlling interests to redemption value, the adjusted loss was RMB2.45 billion, or RMB2.38 a share, beating the FactSet consensus of a loss of RMB2.53 a share.
Revenue increased 25.0% to RMB1.84 billion ($257.0 million), above the FactSet consensus of RMB1.70 billion.
Vehicle deliveries totaled 4,799 vehicles, including 4,196 ES6s and 603 ES8s, representing a 35.1% increase from the sequential second quarter. The ES6 is the 5-seater high-performance sport-utility vehicle (SUV), which began deliveries in June, and the ES8 is Nio’s flagship SUV, which began deliveries a year earlier.
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The stock ran up 40% in early trade, to lead all gainers listed on the New York Stock Exchange. Volume spiked to over 96 million shares within the first hour after the open, already nearly triple the full-day average of about 36.9 million shares, and enough to make the stock the most actively traded on major U.S. exchanges.
Shares were on track to post the second-best one-day gain since it went public in the U.S. on Sept. 12, 2018, behind only the 75.8% surge on Sept. 13, 2018.
For the fourth quarter, Nio said it expects revenue of RMB2.81 billion, well above the FactSet consensus of RMB2.07 billion, while deliveries are expected to spike up to jump to over 8,000 vehicles.
“The electric vehicle sector experienced substantial softness in the second half of 2019 after the reduction of EV subsidies in China,” said Chief Executive William Bin Li. “Despite the challenges, NIO’s sales improved solidly since September.”
“Facing a continuous soft auto market, we strongly believe the smart premium EV sector will outperform the industry in its growth rate in the foreseeable future,” said Chief Financial Officer Wei Feng.
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Helping to boost the company’s third-quarter results, Nio said it implemented cost-control measures to improve efficiency, resulting in a 18.1% reduction in selling, general and administrative (SG&A) expenses from the second quarter and a 21.3% drop in research and development expenses.
Nio’s stock has more than doubled (up 119%) over the past three months but was still down 47% year to date. In comparison, shares of U.S. rival Tesla Inc. TSLA, -3.64% have rallied 24% this year and the S&P 500 index SPX, -0.48% has climbed 29%.
