Nio stock gains despite wider than expected Q2 loss

Nio Inc (NIO.US) stock rose nearly 3.0% despite the Chinese electric vehicle producer reported a bigger second-quarter adjusted net loss, compared with a year earlier. Also, the company's Q3  financial outlook missed analysts’ estimates.

• Tesla's competitor recorded a loss of 25 cents from $1.54 billion in sales. Market expected a loss of 18 cents a share on sales of $1.42 billion. In Q1, the company reported a loss of 12 cents a share on sales of $1.56 billion.

• Gross margin fell to 13.0% from 18.6%, due to expanded investment in power and service network.

• Net loss for the period of $409.8 million marked an increase of 50.4% from the Q1 and an increase of 316.4% on YoY basis.

• In the Q3 Nio plans to deliver approximately 32,000 cars. That implies September deliveries of about 11,000 vehicles. NIO has delivered almost 21,000 vehicles in the first two months of the quarter. Meanwhile Wall Street expects around 37,000 vehicle sales, including 17,000 in September, which would be the company's new record. 

• Q3 sales are expected to come in just under $2 billion, well below market estimates of $2.4 billion.

• However company's CEO William Bin Li called the second half of 2022 a "critical period" and pointed out that deliveries started to recover after falling in Q2 vs. Q1. Li mentioned that deliveries of the new SUV, the ET7, hit full speed last month and production of the new ET5 sedan is on track to begin at the end of September.

Nio Inc (NIO.US) stock price managed to erase early losses and is currently testing local resistance at $17.85, which is marked with the previous price reactions. Should current sentiment prevail, upward move may accelerate towards the upper limit of the consolidation zone around $24.00. On the other hand, if sellers manage to regain control, another downward move towards support at $14.75 may be launched. Source: xStation5