: Nio stock drops after revenue comes up well short of expectations, and outlook is downbeat

The U.S.-listed shares of Nio Inc. NIO dropped 4.1% in premarket trading Friday, after the China-based electric vehicle maker reported first-quarter losses that widened and revenue that missed expectations and provided a downbeat outlook amid a decrease in average selling prices. Net losses widened to RMB4.86 billion ($707.6 million), or RMB2.91 per American depositary share, from RMB1.27 billion, or RMB1.12 per ADS, in the year-ago period. Excluding nonrecurring items, adjusted per-ADS losses were RMB2.51, compared with the FactSet consensus of RMB2.80. Total revenue rose 7.7% to RMB10.68 billion ($1.55 billion), well below the FactSet consensus of RMB11.80 billion, with vehicle sales down 0.2% to RMB9.224 bln. Cost of sales rose much more than revenue, up 24.2%, as gross margin contracted to 1.5% from 14.6%. Deliveries rose 20.5% to 31,041 vehicles. For the second quarter, Nio expects total revenue of between RMB8.74 billion and RMB9.37 billion, below the FactSet consensus of RMB17.98 billion, and expects deliveries to fall to between 23,000 and 25,000 vehicles. “”In the face of the changing market environment, we will observe and analyze the dynamics of the operating environment and competition landscape promptly, and continue to strengthen our competitive advantages in an agile and efficient manner,” said Chief Financial Officer Wei Feng. The stock has dropped 11.4% over the past three months through Thursday, while the S&P 500 SPX has gained 9.6%.

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