Rivian is ‘hard to look as opportunity’ after Q2 results

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Shares of Rivian Automotive Inc (NASDAQ: RIVN) are undecided in extended trading after the EV startup reported narrower-than-expected loss for its fiscal second quarter.

Notable figures in Rivian Q2 results

Lost $1.70 billion versus the year-ago $580 millionPer-share loss contracted to $1.89 from last year’s $5.74Adjusted for nonrecurring items, per-share loss was $1.62Revenue climbed from “nada” to $364 million in Q2Delivered 4,467 EVs, as per the earnings press releaseOperating expenses shot up 72.5% YoY to $1.0 billion

FactSet consensus was for it to lose $1.63 a share on $335 million in sales. Earlier on Thursday, CEO RJ Scaringe tweeted this:

Today the last piece of structural steel was set on our 650,000 sq. ft. addition in Normal, bringing our plant to over 4M sq. ft. The area will house the manufacturing lines for our next generation of drive units! pic.twitter.com/T8nR25HzdX

— RJ Scaringe (@RJScaringe) August 11, 2022

Rivian stock is down more than 60% versus the start of 2022. The letter to shareholder reads:

Our core focus remains on ramping production. Demonstrated production rates give us confidence in our ability to ramp the production lines in our Normal Factory. However, supply chain constraints will be the limiting factor of our production.

Rivian reiterated its production outlook

Rivian remains committed to producing 25,000 electric vehicles in 2022. Reacting to Rivian Q2 results on CNBC’s “Closing Bell: Overtime”, Odyssey Capital Advisors’ Jason Snipe said:

This story is all about production and navigating through supply chain. It’s a very nascent business, it’s very early stage. For me, it’s hard to look at them as opportunities right now, especially as the Fed is very much engaged. So, I’d maybe look at it in a couple quarters.

Wall Street, however, has a consensus “overweight” rating on the Rivian stock.

The Irvine-headquartered firm ended the quarter with 98,000 preorders (U.S. and Canada) for its SUVs and electric trucks that represents strong demand. Still, Rivian said:

We’re revising our annual adjusted EBITDA guidance (loss) to $5,450 million, which reflects the latest estimates of impacts from ramp of our Normal Factory, raw material inflation, LCNRV adjustment, expedited freight expenses, and supply challenges.

Rivian now expects capital expenditures to cap at $2.0 billion this year versus $2.60 billion it had guided for previously.

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