Rivian shares wobble with missed forecast
Rivian Automotive Inc. fell short of Wall Street’s earnings expectations to start the year as the automaker pursues a costly effort to revamp its manufacturing operations and increase its output of electric vehicles.
The company burned through cash and posted an adjusted loss of $1.24 a share for the first quarter, according to a statement Tuesday. That was worse than the average $1.15 deficit in analyst estimates compiled by Bloomberg.
The results “do not appear to materially change the story which we continue to view as challenging,” Ryan Brinkman, an analyst with JP Morgan Securities, said in a note.
The shares fell almost 9% when the markets opened Wednesday in New York. The shares recovered in afternoon trading, rising 2 cents to close at $10.27.
Rivian continues to struggle with production challenges and wavering consumer demand that has wiped out more than half of its stock value this year. The company, the biggest pureplay maker of battery-electric vehicles in the United States behind Tesla Inc., aims to take out manufacturing costs and prepare its plant for production of a smaller, more affordable compact sport utility vehicle called the R2.
The quarterly results weren’t all bad. Sales were roughly in line with expectations after Rivian last month reported better-than-expected deliveries. The company also stood by its plan to build 57,000 vehicles this year and still sees an adjusted fullyear loss before interest,
taxes, depreciation and amortization of $2.7 billion.
“Rivian’s narrowing grossprofit loss per unit in (1Q), driven by cost-efficiency initiatives, may put the carmaker on the right path to a gross profit break-even by 2024. Yet the visibility of the turnaround remains unclear, with the company’s production guidance unchanged, and a sole bet on savings on variable and fixed costs instead of scale,” said Steve Man, Bloomberg Intelligence autos analyst.
Rivian had warned investors that there would be a planned shutdown of its Normal, Ill., assembly lines in the current period to make technology and components upgrades to its consumer cars.
Those tweaks will put Rivian on a path to modest gross profit in the final three months of this year, the company reiterated Tuesday.
In March, Rivian surprised investors with a plan to delay a new factory in Georgia and launch the mass-market R2 from its existing facility in Illinois.
The company pledged to invest $1.5 billion to expand the Normal plant and secured more than $800 million of incentives from the state.
Rivian, which offers two consumer electric vehicles and a commercial van, is backed by a number of bigname investors, including Amazon.com Inc.
But since its 2021 listing, Rivian’s shares have languished and it has struggled to scale its output.
The manufacturer has continued to cut jobs this year amid economic turbulence and waning demand for its premium-priced cars.