Rivian Reports Q3 Miss Amid Supply Chain Challenges, Cuts EBITA Guidance: Retail Mood Mixed

Electric-vehicle (EV) startup Rivian Automotive, Inc. ($RIVN) reported below-consensus results for its third quarter and reduced its bottom-line guidance for 2024.

Irvine, California-based Rivian reported an adjusted net loss of $0.99 per share versus a loss of $1.14 per share incurred a year ago. The bottom-line result missed the consensus estimate that called for a loss of $0.96 per share.

Third-quarter revenue fell from $1.34 billion a year ago to $874 million, with EV deliveries at 10,018 units, down from the year-ago’s 15,564 units. The softer deliveries was blamed on shortage of a shared component within its Enduro motor system on the R1 and R1 commercial vehicle platforms.

The company generated a negative gross profit per EV of $39.13 million, wider than $30.65 million a year ago. 

 Cash, cash equivalents, and short-term investments balance at the end of the quarter was $6.74 billion.

Speaking on the earnings call, CEO R.J. Scaringe said, “This has been a tough quarter for us because of some of those supply chain or supply ramp challenges.”

Rivian reaffirmed its 2024 delivery guidance of 50,500-52,000 units and reiterated its outlook for a  modest positive gross profit in the fourth quarter. Incidentally, the company had downwardly adjusted the guidance when it announced its third-quarter deliveries in October. It also maintained its production guidance of 47,000-49,000 units. 

Citing the impact of the lower production outlook on profitability, the company lowered its annual adjusted earnings before interest tax, depreciation and amortization guidance from a loss of $2.7 billion to a loss of $2.83 billion-$2.88 billion.

Capital expenditure for the year is guided to $1.2 billion.

The company said during the quarter, it has made progress with advancing the development of R2 based on its second-generation platform. About 85% of the sourcing of R2 bill of materials is now complete and the costs are in line with the company’s target, it said. The R2 will use 4695 cylindrical batteries from LGES Energy Solutions,

Scaringe said, “We continue to see cost progress from our second generation R1 vehicles which we expect to be represented in the fourth quarter.”

“Over the long-term we believe Rivian’s value will be determined by the scale it can reach with its midsize platform including the R2, R3, and R3X, as well as our ability to continue to reduce costs and develop differentiated technologies,” he added.

The stock ended Thursday’s after-hours session up 1.29% at $10.05. RBC Capital Markets analyst Tom Narayan said the stock could react positively to the print as the company maintained its gross profit outlook as opposed to fears among analysts community that the guidance would be withdrawn, CNBC reported.

Retail sentiment toward the stock was mixed. A user on the Stocktwits platform fretted over the loss per EV and raised the possibility of a bankruptcy filing.

Another said a bad quarter was already priced in and there the setup is looking great going forward, with the R2 around the corner and federal loans coming.

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