Rivian’s third-quarter financial results fell short of Wall Street expectations, leading the electric vehicle (EV) maker to lower its earnings guidance for the year.
Rivian Automotive, the electric truck and SUV manufacturer, reported a mixed third quarter, revealing a wider-than-expected revenue shortfall that led the company to adjust its earnings expectations for the full year. The automaker reported revenue of $874 million, notably below the $990 million projected by analysts. Additionally, Rivian’s adjusted loss per share came in at 99 cents, missing the anticipated loss of 92 cents. The company closed Thursday’s regular trading up 3.5% at $10.05 per share, although after-hours trading saw a slight gain of 2%.
Rivian announced that it now expects its annual adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) to fall between a loss of $2.83 billion and $2.88 billion, revising its previous forecast of approximately $2.7 billion. The adjusted guidance follows production challenges, which Rivian attributes to supply chain issues affecting its R1 vehicles, as well as unexpected component shortages in recent months.
Despite the quarter’s challenges, Rivian reported a narrowed net loss of $1.1 billion, improving from a loss of $1.37 billion in the same period last year. Operating expenses for the quarter also decreased to $777 million from $963 million the previous year. Gross profit saw improvement as well, with Rivian reporting a negative gross profit of $392 million, an improvement over the $477 million loss recorded last year.
CEO RJ Scaringe expressed optimism regarding the company’s outlook for the remainder of 2024, stating that Rivian is still on track to achieve “modest positive gross profit” per vehicle by the fourth quarter, a goal closely watched by investors.
“Our core focus is on driving toward profitability,” Scaringe told CNBC.
Scaringe pointed to efforts in reducing material costs and securing regulatory credits.
The EV maker also reconfirmed its adjusted annual production target between 47,000 and 49,000 units, which had been revised downward from an initial goal of 57,000 vehicles due to ongoing supplier disruptions. The company reiterated, however, that it remains on target to meet its full-year delivery goal of up to 52,000 units, representing slight growth from 2023.
In a strategic move, Rivian also announced a new partnership with LG Energy Solution to secure battery cells for its R2 vehicles expected in 2026. This collaboration aims to strengthen Rivian’s supply chain and prepare for future expansion as the company advances in a competitive EV market.
Rivian’s stock has been under pressure, declining 57% this year and trading at roughly 87% below its initial public offering (IPO) price of $78. Despite these losses, some analysts remain hopeful. RBC Capital Markets analyst Tom Narayan noted that maintaining the Q4 gross profit target could positively influence the stock’s performance, as many investors were concerned Rivian might retract this goal.
With input from CNBC and Investor’s Business Daily.
