Chinese electric-vehicle maker
reported first-quarter numbers that were a little better than analysts expected. Shares, however, were weaker Monday. Gross profit margins and guidance might be concerning investors.
XPeng (ticker: XPEV) reported a loss of 28 cents per American depositary receipt from $ 1.2 billion in sales. Analysts expected a loss of 30 cents on sales of $ 1.1 billion. In the fourth quarter, XPeng (ticker: XPEV) reported an adjusted loss of 11 cents from about sales $ 1.3 billion.
XPeng’s US-listed stock was down about 4% in early trading Monday.
Dow Jones Industrial Average
futures both rose about 0.7%.
The company delivered 34,561 vehicles in the first quarter. XPeng delivered 41,751 vehicles in the fourth quarter of 2021. The Chinese Lunar New Year holiday in February is a seasonally weak period. First-quarter sales were also impacted by Covid’s reemergence in some areas.
First quarter gross profit margins came in at 12.2%. Analysts were projecting 12.7%. Gross profit margins were 12% in the fourth quarter.
Looking ahead, XPeng expects to deliver between 31,000 and 34,000 vehicles in the second quarter. That implies about 12,000 deliveries for May and June. XPeng delivered 9,002 vehicles in April. XPeng’s best month ever for vehicle deliveries was 16,000 back in December 2021.
Second-quarter sales are expected to be about $ 1.1 billion. Wall Street was projecting about $ 1.2 billion in sales for the current quarter. The number is a little light.
Management remains upbeat about EV trends in China. “Demand for our high-quality EV products was robust and our proprietary suite of technologies continue to lead the industry,” said CEO He Xiaopeng in the company’s news release. “Superior in-house technology development capability and proactive supply chain management enabled us to address supply chain challenges more efficiently. We remain confident in expanding our market share despite the impact of semi-conductor shortage and COVID-19. ”
Results aren’t all that bad considering some of the headwinds such as Covid-19 and what’s happened to the stock. Coming into Monday trading, XPeng stock has declined about 54% this year, worse than the 18% and 14% respective losses for the S&P 500 and Dow.
Investors have sold high-growth stocks amid inflation and rising interest rates. Delisting fears have also contributed to 2022 losses. Shares of US-listed foreign companies might be delisted if the foreign companies do not meet US auditing standards. Many firms in China do not yet meet the requirements.
Invesco Golden Dragon China ETF
(PGJ) holds stock in US-listed Chinese companies including XPeng. The ETF has dropped about 28% in 2022.
Options markets imply the stock will move 10% to 12%, up or down, following earnings. That would be more volatility than recent quarters. XPeng stock has moved about 3.5%, up or down, after the following four quarters. Shares have risen twice and fallen twice over the past four quarters.
The company hosts an earnings conference call at 8 am Eastern time to discuss results. Analysts and investors will be interested to hear an update on demand, Covid and raw materials inflation.
Write to Al Root at firstname.lastname@example.org