Rivian shares fall more than 8% after lost sales, weak outlook

Shares of Rivian Automotive Inc. fell more than 8% in after-hours trading on Tuesday after the electric-vehicle maker trimmed its quarterly loss but missed sales expectations and revealed problems with parts shortages and other manufacturing issues as it tried to ramp up production.

“The supply constraint is by far the biggest constraint,” Rivian told RIVN,
Chief Executive RJ Scaringe said in a call with analysts following the results.

Ongoing supply chain issues remain “the main limiting factor of our production,” and the cost of expediting parts is also taking its toll, Rivian executives said in a letter to shareholders accompanying the results.

The company faced “several days of lost production” due to supplier shortages, and the “challenges” expected to continue into 2023.

Share losses widened as the bidding began, with investors also struggling to digest Rivian’s slight loss of production for the year and a weaker-than-hoped 2023 production forecast.

Rivian lost $1.7 billion, or $1.87 per share, in the fourth quarter, compared to a loss of $2.5 billion, or $4.83 per share, in the same period last year. Revenue increased to $663 million from $54 million a year ago.

The FactSet consensus called for a $1.96 per share loss on revenue of $724 million for Rivian.

The EV maker lost $6.75 billion in 2022, up from a loss of $4.69 billion in 2021.

The company forecast production of 50,000 vehicles in 2023. Rivian produced 24,337 vehicles in 2022, just below the forecast of 25,000 vehicles for the year.

“Production guidance was disappointing and points to a significant cut in 2023 sales estimates,” CFRA analyst Garrett Nelson told MarketWatch.

CFRA had a 2023 production estimate of 60,000 units, and Wall Street consensus was around 62,200 vehicles, Nelson said.

“The belief was that Rivian could do much better in 2023,” the analyst said. Many on Wall Street expected supply chain issues to be in the rearview mirror, Nelson said.

Additionally, for the first time, Rivian has not provided an update on its vehicle reservations and raised a “red flag,” Nelson said, particularly as other EV manufacturers such as Lucid Group Inc. LCID,
reported declining reservation numbers.

On the conference call, Scaringe dodged a question about Rivian’s backlog, saying that despite rising interest rates and other factors affecting demand, “the demand backlog that we have is very resilient.”

Scaringe also said Rivian, like other automakers, is in the midst of discussions about the “proper sourcing” of lithium, which “could include ownership positions,” but no announcements so far.

Tesla Inc. TSLA,
The company reportedly intends to buy its own lithium mining company.

Rivian also continued to pay a premium for goods and spend money on expedited freight.

Rivian is yet to make a profit after going public in November 2021 in an IPO that valued Rivian at nearly $90 billion and raised about $12 billion.

See also: Greenlight sells Intel and Rivian, adds Tenet, Funko

Rivian shares are down about 71% over the past 12 months, which compares to losses of about 9% for the S&P 500 index SPX.

https://www.marketwatch.com/story/rivian-stock-sinks-after-earnings-miss-lowered-outlook-cea9e043?siteid=yhoof2&yptr=yahoo Rivian shares fall more than 8% after lost sales, weak outlook

Russell Falcon

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