NKLA - Nikola stock slips on revenue miss signal of production pause

2023-05-09 08:55:51 ET

Nikola Corporation ( NASDAQ: NKLA ) stock edged lower on Tuesday after falling short of Q1 earnings estimates and outlining an upcoming production pause.

The Phoenix-based manufacturer reported a $0.26 per share loss, meeting consensus estimates, while $11.12M in revenue was $1.23M below expectations. An adjusted EBITDA loss of $126.7M for the quarter outpaced the $123.4M consensus expectation.

“Nikola had a very solid quarter, building sales momentum with Class 8 battery electric truck deliveries to customers, and orders for 140 hydrogen fuel cell trucks from customers,” CEO Michael Lohscheller said. “We have the right products at the right time, and as we move forward, we will be focusing on the North American market, hydrogen fuel cell trucks, the HYLA hydrogen refueling business, and autonomous technologies. We are on the right path with our re-energized management and commercial teams, improved sales strategy, new dealers, and energy partners.”

The company noted 31 wholesale deliveries to dealers and 33 retail sales from dealers to end customers in the quarter. The consensus delivery expectation stood at 29. The company did not offer guidance on deliveries expected in the quarter ahead.

Moving forward, the company indicated that it has “reprioritized the business” in order to focus on hydrogen fuel cell trucks, HYLA hydrogen ecosystem, and autonomous technologies, vehicle controls, and software in the North American market. The earnings release explained that management has shifted focus to areas where it believes it has “competitive and first mover advantage” and reducing spending in more capital intensive segments.

“As such, we are selling our stake in the European manufacturing joint venture to Iveco Group in exchange for $35M cash consideration and 20.6M shares of Nikola common stock that will be returned to us by Iveco,” the earnings release stated. “Iveco will remain an important partner and key supplier for us and will cheer for our long-term success, and they are expected to remain a meaningful stockholder moving forward.”

Elsewhere, the company touted continued progress on Phase 2 assembly hall expansion in Arizona, which it expects to complete by the close of Q2. However, it expects to stop production at the close of this month.

“At the end of May, we plan to pause truck production as we convert the line to accommodate both hydrogen fuel cell and battery electric trucks on the same line and will resume production in July with the first saleable hydrogen fuel cell trucks,” the earnings release explained. We also anticipate we will begin battery module and pack manufacturing in Coolidge by the end of July, and Bosch Fuel Cell Power Module assembly by December 2023.”

Shares of Nikola Corporation ( NKLA ) dipped 1% shortly before Tuesday’s market open.

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