Xpeng shares slump as disappointing Q4 guidance offsets positive earnings

Investing.com-- Xpeng Inc’s Hong Kong shares fell sharply on Tuesday after the electric vehicle maker presented a disappointing outlook for the fourth quarter, which largely offset a strong performance in the third quarter. 

Xpeng Inc (HK:9868) slid 8.5% to HK$87.85, lagging a 1.3% drop in the Hang Seng index. The company’s U.S. shares (NYSE:XPEV) slid more than 10% overnight. 

The EV maker clocked a much narrower-than-expected third-quarter loss– at 0.16 yuan per share against expectations of 0.566 yuan per share. Its revenue doubled from last year to 20.38 billion yuan, and was just below estimates of 20.63 billion yuan.

But the company’s fourth-quarter guidance largely underwhelmed, at between 21.5 billion yuan and 23.0 billion yuan and well below consensus estimates of 25.09 billion yuan. 

While the company forecast robust vehicle deliveries in the fourth quarter, between 125,000 and 132,000 units, its middling revenue guidance pointed to continued pressure from a bitter price war with its local rivals.

Xpeng sold a record number of vehicles in the third quarter. But the company struggled to turn a profit, given that a bulk of its sales were driven by aggressive price cuts and incentives, which crimped its margins.

Still Xpeng was seen drawing closer to breakeven, with its non-GAAP net loss narrowing sharply in the third quarter.

CEO and Co-founder He Xiaopeng reiterated Xpeng’s target of achieving breakeven in the fourth quarter.