- Analysts estimate adjusted EPS of -1.53 yuan (-$0.22) vs. -0.42 yuan in Q2 FY 2021.
- NIO's vehicle deliveries, already announced, climbed YOY, although at a slower pace than recent quarters.
- Revenue is expected to rise at a healthy pace, although growth continues to slow.
NIO Inc. (NIO) is among a group of fast-growing electric vehicle (EV) makers based in China, but the period of rapid growth may be coming to an end. Rivals Xpeng Inc. (XPEV) and Li Auto Inc. (LI) each reported a drop in monthly vehicle deliveries from July to August due to supply chain issues, a weakened Chinese economy, and ongoing COVID-19-related shutdowns across the country. While NIO was able to post a modest increase in deliveries over this period, it could face similar challenges going forward.
Investors will watch to see how wider economic factors are impacting NIO's financial performance when the company reports its Q2 FY2022 earnings on Sept. 7, 2022. Analysts predict that the company's losses per share will widen significantly year-over-year (YOY) as revenue improves at a modest rate compared to recent quarters. Note that NIO shares referred to throughout this story represent NYSE-listed American depositary shares (ADS) with the ticker NIO. Note also that NIO presents earnings and revenue figures in Yuan (CNY). As of Sept. 6, 2022, 1 CNY was equivalent to approximately $0.14 USD.
Investors are also interested in the number of automobiles NIO delivered. The electric carmaker reported its second-quarter vehicle deliveries in July. Total vehicle deliveries surpassed analysts' expectations, but growth decelerated from recent quarters.
NIO shares have underperformed the market for the large majority of the past year. The company's stock staged a minor rally in October and early November 2021, briefly outpacing the market. However, from November 2021 through March 2022 the shares plummeted. They recovered modestly leading up to the company's Q4 FY 2021 earnings report in late March, but then drifted downward through May. NIO's shares once again recovered slightly through late June, but have since given up much of those gains. As of Sept. 6, 2022, NIO stock has provided a 1-year trailing total return of -57.5%, well behind the S&P 500's -13.3% return.
NIO Earnings History
NIO has posted losses per share for at least the last 13 consecutive quarters. Those losses narrowed on a YOY basis for each quarter from Q2 FY 2019 through Q4 FY 2020. In FY 2021, losses per share widened YOY for each quarter except for Q2. Losses then narrowed once again YOY for Q1 FY 2022, suggesting that a trend toward improvement may be developing. However, analysts predict that NIO will not be able to maintain improvement in its losses per share into Q2 FY 2022. The company is expected to post dramatically widening losses per share for the quarter compared to the same quarter a year earlier.
NIO's revenue performance has been tumultuous in recent years. In FY 2019 and FY 2020, the company saw both periods of massive revenue growth as well as revenue declines YOY. Starting in Q2 FY 2020, though, NIO's revenue has grown at a robust pace YOY each quarter. It has at least doubled YOY for six out of the nine most recent quarters through Q1 FY 2011. But revenue growth slowed considerably in Q4 FY 2021 and Q1 FY 2022. Analysts now expect revenue gains to decelerate even further for Q2 FY 2022 to the slowest pace in several years.
|NIO Key Stats|
|Q2 FY 2022||Q2 FY 2021||Q2 FY 2020|
|Earnings Per Share (Yuan)||-1.53 (estimate)||-0.42||-1.15|
|Revenue (Billion Yuan)||10.0 (estimate)||8.4||3.7|
|Automobile Deliveries||25,059 (actual)||21,896||10,331|
Sources: Visible Alpha and NIO Inc.
The Key Metric
As mentioned above, investors are also watching the number of automobiles NIO delivered each quarter. The number of automobiles sold is also referred to as vehicle deliveries by the company. NIO generates some revenue from the other products and services it provides, but the majority of revenue is derived from vehicle sales. The company currently makes vehicles including: the ES8, the company's six-seater or seven-seater flagship smart electric SUV; the ES6, the company’s five-seater high-performance smart electric SUV; the EC6, the company’s five-seater electric coupe SUV; and the ET7, the company's smart electric sedan. The number of vehicle deliveries provides an indication of the demand for NIO's vehicles as well as the company's ability to scale production. For NIO, that ability has run into challenges amid the global chip shortage, supply chain constraints, and China's COVID-19 control measures.
NIO's automobile deliveries have skyrocketed in recent years. The company delivered a total of 20,152 vehicles for all of FY 2019. That number more than doubled to nearly 44,000 for FY 2020, and then more than doubled again to over 91,000 for FY 2021. But quarterly growth in vehicles delivered has slowed significantly in recent quarters. For Q2 FY 2021, vehicles delivered more than doubled YOY. By comparison, vehicles delivered climbed by a relatively modest 14.4% YOY for Q2 FY 2022.
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NIO Inc. "Form 20-F for the fiscal year ended December 31, 2021," Page 11.