Nikola Reports a Smaller Loss Than Expected. Shares Are Rocketing.

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Stock of the electric and hydrogen-electric truck maker

Nikola

is rising after the company reported a smaller-than-expected fourth-quarter loss Thursday morning. Earnings don’t matter all that much for the trucking startup. Investors are focused on other things.

Nikola

(ticker: NKLA) stock was down 6.7% in premarket trading as markets slid broadly in response to Russia’s invasion of Ukraine, but now shares are now up 10.2% in early trading. The

S&P 500
and

Dow Jones Industrial Jones
are down 1.7% and 1.9%, respectively.

The company reported an adjusted loss of 23 cents a share on essentially no sales. Wall Street was looking for a loss of 32 cents a shares on $2.2 million in sales.

Although the results look OK, sales and earnings aren’t particularly meaningful at this stage in Nikola’s development. The company has just started to deliver products to customers.

“During the fourth quarter, we began delivering Pre-Series Tre [battery-electric vehicles] to customers and dealers, and we are ramping up production in Coolidge,” said CEO Mark Russell in the company’s news release. Coolidge is the company’s manufacturing facility in Arizona.

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“We anticipate beginning series production of the Tre BEV on March 21. We are laser-focused on delivering vehicles and generating revenue,” Russell said.

Wall Street projects sales will hit about $134 million in 2022.

In addition to delivering some battery-electric vehicles, Nikola started a pilot program for its hydrogen-fuel-cell-powered electric trucks with beer maker Anheuser-Busch. Two trucks are in daily service in Anheuser-Busch’s southern distribution network.

It’s hard to pinpoint exactly what is exciting investors. Nikola reported on its earnings conference call that it made 30 Tre trucks in the fourth quarter. What’s more, the company has built seven fuel-cell trucks so far. Nikola also said the Tre truck was eligible for purchase tax credits from the State of California.

Nikola plans to build 300 to 500 trucks in 2022. That range of truck production should allow the company to exceed Wall Street sales estimates.

All that is good news, but investor relief is also a possibility for the positive stock price reaction. Shares have been badly beaten up. Coming into Thursday trading, Nikola stock was down about 31% year to date. Rising interest rates, inflation and the Russia-Ukraine conflict has made some investors less willing to hold more-speculative growth stocks.

Write to Al Root at [email protected]