Li Auto missed its second-quarter targets Monday morning and shares of the Beijing, China-based electric vehicle manufacturer sank before the market open but cut early losses. The company has been looking to rebound from Covid lockdown production issues, and to keep pace with Tesla and Nio in China's EV marketplace.
Li Auto Earnings
Estimates: Wall Street predicted Li Auto will report a net loss of 2 cents per share on $1.4 billion in sales in the second quarter, according to FactSet.
Results: Revenue increased 73% to $1.3 billion in the second quarter. Li Auto reported a net loss of 4 cents per share, according to FactSet. The company had a loss of 2 cents per share in Q1 2021.
Outlook: Management provided disappointing guidance, expecting to deliver between 27,000-29,000 vehicles in the third quarter. That's a potential increase in the range of 7.5%-15.5%. During the Covid-19 pandemic, Li Auto reported 17,575 deliveries in Q2 2021 and 25,116 vehicle deliveries in Q3 2021.
The company is also forecasting revenue to be around $1.34 billion-$1.43 billion in Q3. This is well below the $2.1 billion in total sales FactSet analysts have predicted.
LI stock dropped 6.2% in premarket activity but gained 0.2% during Monday's market trading. On Friday, the stock cut losses and ended down 0.7% to 32.49. A 23% pullback from a late June high has left shares below support at their 10-week moving average.
Li Auto unveiled its new L9 model SUV in June, which received 30,000 orders in first 72 hours of its availability. Deliveries are expected to begin later this month, with the company guiding expectations to 10,000 deliveries in September.
In Q1, Li Auto earned 7 cents per share, up from a loss of 2 cents per share. Sales ballooned 175% from $546 million to $1.5 billion.
The company ranks first in IBD's Auto Manufacturers industry group, ahead of Tesla, Ford and others.
Li Auto stock has a 90 Composite Rating out of 99. It has a 95 Relative Strength Rating, an exclusive IBD Stock Checkup gauge for share price movement with a 1 to 99 score. The rating shows how a stock's performance over the last 52 weeks holds up against all the other stocks in IBD's database. The EPS rating is 77.
Company Background
Li Auto is one of the top EV companies in China. It designs, develops, manufactures and sells electric vehicles and has focused on producing EVs with extended-range capabilities on one charge.
Is Li Auto A Buy Or A Sell Ahead Of Earnings
Founded in 2015, Li began volume production in 2019. Its competitors in the electric vehicle market include EV giants Tesla, Nio and, to a lesser extent, BYD.
The company debuted its first electric hybrid SUV, called the Li ONE, in December 2019. That vehicle carries a price tag ranging from $29,000-$76,000 and was one of China's top-10 sellers across all fuel types in 2020. The company announced its second vehicle, the Li L9, a six-seat SUV, in June, 2022.
Covid shutdowns hit production and demand for Li Auto and other EV makers, earlier this year. However, production recovered somewhat in May and June.
Despite production impact from coronavirus lockdowns in China, Li Auto reported an uptick year-over-year in EV deliveries in July. The company sold 10,422 vehicles, an increase of more than 21% from last July.
On Thursday, Reuters reported that the four-year-old partnership between Li Auto and Didi, a China-based car service company, to create EV taxis had applied for bankruptcy. Didi and Li Auto had started Beijing Judian Chuxing Technology in 2018 to develop and produce electric vehicles for ride-hailing services. Didi owns 51% of the company while Li Auto holds 49% of the enterprise.
Please follow Kit Norton on Twitter @KitNorton for more coverage.
