Rivian’s Stock Plummets After Disappointing Q4 Results

Rivian Stock Plummets After Disappointing Q4 Results | The Enterprise World

Rivian Stock plummeted in after-hours trading on Wednesday following the company’s release of its fourth-quarter results, which fell short of Wall Street’s expectations. The electric adventure vehicle manufacturer reported a mixed performance for the quarter and issued a production and profit forecast that disappointed investors.

Rivian disclosed its projection for 2024 vehicle production, estimating it at 57,000 units, significantly lower than the anticipated 80,000 units. Additionally, the company forecasted an adjusted EBITDA loss of $2.70 billion and capital expenditure outlays of $1.75 billion, missing analysts’ estimates of $2.59 billion and $2.37 billion, respectively. As a result of economic uncertainty, Rivian announced plans to reduce its salaried staff by 10%.

Rivian Stock: Production and Profit Forecast Misses Expectations

In response to the news, Rivian stock tumbled by over 15% during after-hours trading. For the fourth quarter, Rivian reported revenue of $1.32 billion, surpassing the estimated $1.25 billion, but posted an adjusted loss per share of $1.36, slightly higher than the expected $1.33. On an adjusted EBITDA basis, Rivian reported a loss of $1.096 billion, narrower than the previous year’s loss of $1.46 billion. RJ Scaringe, Rivian’s CEO, expressed optimism about the company’s progress in 2023 despite economic challenges and emphasized the focus on cost efficiency, achieving positive margins, and strengthening the go-to-market function for long-term growth.

Regarding its cash position, Rivian stock reported $7.86 billion in cash and cash equivalents at the end of the fourth quarter, down from $9.1 billion in the previous quarter. Deliveries in the fourth quarter totaled 13,972, slightly below consensus estimates, while production exceeded estimates at 17,541 units.

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Challenges Ahead Despite Optimistic Outlook

During the earnings call, CFO Claire McDonough disclosed that Rivian expects first-quarter 2024 deliveries to be 10% to 15% lower than those in the fourth quarter of 2023. Scaringe also acknowledged challenges related to supplier changeover, which may impact vehicle deliveries in the first quarter due to missing components.

In 2023, Rivian surpassed its production goal, producing 57,232 vehicles and delivering 50,122. The company’s production forecast for 2024 stands at just over 80,000 vehicles, according to Bloomberg consensus estimates. Rivian reiterated its outlook of achieving “modest gross profit” by the end of 2024, with McDonough noting that the company was nearing a positive contribution margin by the close of 2023.

According to an email obtained by Business Insider, Rivian CEO RJ Scaringe informed staff on Wednesday about impending cuts, with the details of their impact to be disclosed on Thursday morning. Scaringe mentioned in the email that staff would receive notifications between 7:30 and 8 a.m. Pacific Time on Thursday, although news of the layoffs surfaced on Wednesday afternoon.

The email emphasized the company’s intention to ensure a respectful notification process, acknowledging the challenges posed by the waiting period between the announcement and the notification of affected staff. Rivian, in response to inquiries from BI, did not specify the exact number of salaried staff to be affected but noted that the company has a total of 16,700 employees, including both salaried and hourly workers.

Also read: Rivian Shifts Gear: Introduces Paid Charging Model for Adventure Network

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