Chinese electric vehicle maker XPeng has announced its third-quarter earnings, surpassing Wall Street expectations. Despite this positive news, the company’s stock experienced a weak start to trading.
Strong Financial Performance
XPeng reported an adjusted loss of $380 million from sales amounting to $1.2 billion for the quarter. This result exceeded predictions, as analysts were expecting a $400 million loss and sales of $1.1 billion.
Impressive Vehicle Deliveries
The company delivered 40,008 cars in the third quarter, a significant increase compared to the 23,205 delivered in the previous quarter and the 29,570 delivered in the same quarter of 2022. XPeng has now experienced nine consecutive months of growth in vehicle deliveries, indicative of its expanding market presence.
Improved Cash Flow and Gross Margin
Describing the company’s progress, co-president Brian Gu stated, “XPeng vehicle deliveries have grown for nine consecutive months and our free cash flow has substantially improved.” With new products and technology-driven cost controls, XPeng anticipates notable improvements in its gross margin. Although still negative at minus 2.7% for the third quarter, the gross profit margin demonstrated a positive increase of more than one percentage point compared to the previous quarter.
Future Growth Prospects
Looking ahead, XPeng expects even stronger free cash flow in the fourth quarter. This marks the beginning of their pursuit of long-term scalable profitability.
In conclusion, XPeng’s impressive Q3 performance, including increased vehicle deliveries and improved financial indicators, positions the company well for continued success in the electric vehicle industry.
XPeng Expects Strong Sales in Fourth Quarter
XPeng, a leading electric vehicle (EV) manufacturer, anticipates delivering between 59,500 and 63,500 units in the fourth quarter. Although Wall Street estimates around 54,300 units, XPeng remains optimistic about its sales prospects. The company projects sales to range from $1.8 billion to $1.9 billion, while analysts predict approximately $1.7 billion.
Positive Performance Amidst Challenging Market
Despite EV sales concerns impacting the stock market, XPeng’s stock has been resilient, showing optimism for investors. During the past three months, XPeng’s shares have surged by approximately 6%, and over the past year, they have increased by about 88%. In contrast, other EV-related stocks like NIO and ChargePoint have witnessed substantial declines. NIO’s shares have dropped around 36% in the past three months, while ChargePoint’s shares are down by about 57%.
Focus on EV Demand and Financial Position
To address investor inquiries about EV demand in China for the fourth quarter and beyond, XPeng’s management will host a conference call at 8 a.m. Eastern time. Analysts and investors eagerly await further insights into the company’s growth prospects. It is worth noting that XPeng concluded the quarter with a healthy cash position of approximately $5 billion.