NIO’s first-quarter performance
Chinese electric carmaker NIO (NIO) traded on a highly volatile note in the first quarter. Its stock fell 46.7% in March after posting a solid gain of 50.2% in the first two months of 2019. NIO’s massive sell-off in March was the result of several negative factors, including the cancellation of a Shanghai-based factory, weak first-quarter revenue guidance, and a steep fall in its car deliveries in the first two months of the year.
Earlier today, the company released its March and first-quarter car delivery data. Let’s take a closer look.
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NIO’s first-quarter car deliveries
On April 2, NIO said in a statement that it had delivered 3,989 units of its ES8 premium SUV in the first quarter of 2019. The data reflected a 50.0% sequential decline in the company’s car deliveries from 7,980 units in the fourth quarter of 2018.
Despite revealing a 50% fall in its first-quarter car deliveries, NIO stock was trading on a bullish note on the morning of April 2. At 10:40 AM EDT, the stock was up 6.7%, outperforming key US indexes, which were trading without any notable changes from the previous day.
Why the data pleased the bulls
In its fourth-quarter earnings report, which it released on March 5, NIO provided a dismal first-quarter car delivery guidance range of 3,500–3,800 units, which triggered a sell-off in its stock in March. While the company’s first-quarter car deliveries of 3,989 units were much worse than the previous quarter’s deliveries, they still were in the upper range of its guidance. Its disappointing first-quarter car delivery guidance had already been priced in to its stock with March’s losses.
Today’s better-than-expected car delivery data could be the primary driver of investors’ confidence in the stock.