Why Nio Stock fell on profit day

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What happened

Nio‘s (NYSE: NIO) the benefits are not even known yet, but already the actions of the Chinese electric car manufacturer run downhill.

As of 10 a.m. EST, Nio stock has lost 4.4% of its market cap.

Image source: Getty Images.

So what

Nio announced earlier this month that it will release its third quarter 2021 results after markets close this afternoon. What will Nio bring back?

Well, earlier this month the company warned of a 27.5% drop in deliveries in October, compared to cars delivered in October 2020. It certainly sounds worrying. On the other hand, Nio also said continue to expand its capacity to produce new cars, targeting an annual production capacity of 240,000 electric vehicles.

Meanwhile, the company remains on track to start selling its new ET7 luxury sedan in China next year, and to start sales of its ES8 electric SUV in Norway as well, both of which are developments that could help improve sales next year.

Now what

On Wall Street, forecasts are for Nio to report that its third-quarter sales more than doubled to $ 1.46 billion. If the negative surprise in October sales reverses that expectation, things could turn badly, especially as Nio’s earnings are expected to remain negative with a loss of $ 0.09 per share.

And yet the most decisive factor raise or lower the stock of Nio tonight may be the company’s forecast. On Yahoo! Finance, analysts are hoping to see Nio finally make a fourth quarter profit – $ 0.01 per share. The company is still probably at least a year away from annual profits, mind you. But while Nio can at least promise to meet analyst expectations in the fourth quarter, the nasty October delivery surprise should soon be forgotten.

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Rich Smith has no position in any of the stocks mentioned. The Motley Fool owns stock and recommends NIO Inc. The Motley Fool has a disclosure policy.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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