What Investors Should Expect from NIO’s 2018 Earnings


Feb. 22 2019, Updated 5:00 p.m. ET

NIO’s earnings

While NIO (NIO) stock was trading with a 3.0% month-to-date fall as of February 21, it was still up 19.9% YTD (year-to-date). Most other Chinese companies, including Tencent Holdings (TCEHY), Huya (HUYA), Baidu (BIDU), Alibaba (BABA), and Tencent Music (TME), have also traded on a largely bullish note in 2019 so far. In contrast, Chinese e-commerce car company Uxin (UXIN) and American electric carmaker Tesla (TSLA) have fallen 13.6% and 12.5% YTD, respectively.

Let’s move on by looking at the recent trend in NIO’s earnings.

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Recent trend in NIO’s earnings

In the third quarter, NIO reported an improvement in its adjusted net loss per share to ~10.35 Chinese yuan (or $1.51) compared to its loss of 57.82 yuan per share in the second quarter of 2018 and its loss of 58.52 yuan per share in the third quarter of 2017.

However, its earnings in the third quarter were much worse than Wall Street analysts’ estimate of a net loss of 2.36 yuan per share.

The third quarter of 2018 was the first full quarter of car production for NIO after it started the production of its premium electric SUV, the ES8, toward the end of the second quarter. Considering the significant rise in its vehicle production, a decline in the company’s net loss per share could be considered a positive factor.

According to estimates compiled by Thomson Reuters, analysts expect NIO to continue seeing net losses in 2019, but its losses are expected to improve significantly this year.

In the fourth quarter of 2018, while the company continued to produce the ES8, it also started ramping up the production of its lower-priced electric SUV car model, the ES6. This ramp-up phase could increase NIO’s expenses in the fourth quarter, resulting in higher losses.

In the next article, we’ll take a look at Wall Street analysts’ recommendations on NIO stock.


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