NIO stock drops after downbeat outlook, steep drop in gross margin offset narrower-than-expected loss

Shares of NIO Inc.
NIO,
-6.62%

fell 2.0% in premarket trading Thursday, after the China-based electric vehicle maker reported a narrower-than-expected first-quarter loss and revenue that topped expectations, but a sharp contraction in gross margin and a downbeat outlook due to volatilities in the supply chain and vehicle delivery challenges resulting from the recent COVID-19 resurgence. The net loss narrowed to RMB1.27 billion ($200.5 million), or RMB1.12 a share, from RMB4.95 billion, or RMB3.14 a share, in the year-ago period. Excluding nonrecurring items, the adjusted per-share loss was RMB0.79, beating the FactSet consensus of RMB0.94. Total revenue grew 24.2% to RMB9.91 billion ($1.56 billion), above the FactSet consensus of RMB9.90 billion, with deliveries reaching a quarterly record of 25,768 vehicles. Gross margin contracted to 14.6% from 19.5%, amid lower average selling prices due to changes in product mix, increased investment in power and service network and higher battery costs. For the second quarter, NIO expects revenue of between RMB9.34 billion to RMB10.09 billion, below the FactSet consensus of RMB11.65 billion, with deliveries expected to decline to between 23,000 and 25,000 vehicles. NIO’s stock has tumbled 35.7% year to date through Wednesday, while the iShares China Large-Cap ETF
FXI,
-2.86%

has slipped 7.0% and the S&P 500
SPX,
-0.50%

has dropped 13.7%.

Source: https://www.marketwatch.com/story/nio-stock-drops-after-downbeat-outlook-steep-drop-in-gross-margin-offset-narrower-than-expected-loss-2022-06-09?siteid=yhoof2&yptr=yahoo