Nikola's stock turns lower after revenue miss and production pause to refocus on hydrogen-fuel-cell trucks

By Tomi Kilgore

Adjusted losses widen in line with expectations but mark the first missed beat in nearly three years

Shares of Nikola Corp. slumped Tuesday, reversing an early rise, after the electric-vehicle maker missed first-quarter revenue expectations and said it would pause production to modify its Arizona assembly line in order to refocus its business on hydrogen-fuel-cell trucks.

The company also reported a wider adjusted loss that matched expectations but marked the first time it didn't beat bottom-line forecasts in nearly three years.

The company said it has "reprioritized" its business to focus on North America and on hydrogen-fuel-cell trucks, its hydrogen-refueling business and autonomous technologies. As a result, Nikola is selling its stake in the Nikola Iveco Europe manufacturing joint venture in Ulm, Germany, to Iveco Group for $35 million in cash and 20.6 million Nikola shares returned to the company.

The stock (NKLA) dropped 10.7% in midday trading, after rising as much as 5.1% premarket just minutes after the quarterly results were released.

Net losses for the quarter to March 31 were $169.1 million, or 31 cents a share, after a loss of $152.9 million, or 37 cents a share, in the same period a year ago. The per-share loss narrowed even as net losses widened, because the number of shares outstanding used in calculating per-share results increased by 32.4% to 549.7 million shares.

Excluding nonrecurring items, such as stock-based compensation and legal matters, adjusted per-share losses widened to 26 cents from 21 cents, the same as the FactSet loss consensus of 26 cents. That was the first time since the second quarter of 2020 that per-share losses weren't narrower than the FactSet consensus.

Revenue increased nearly sixfold, by 489.1%, to $11.12 million from $1.89 million, but was below the FactSet consensus of $12.88 million. Truck sales came in at $10.06 million, compared with zero a year ago, while service and other revenue fell 43.7% to $1.06 million.

Nikola said it produced 63 Tre battery-electric trucks and delivered 31 to dealers.

"As we have sufficient inventory of the battery electric truck, we will temporarily pause production in Coolidge [Ariz.] as we modify the assembly line to accommodate both hydrogen fuel cell and battery electric builds on the same line," the company said in a statement. "After we resume production in Coolidge, the battery electric Tre will remain in our lineup as a build-to-order product."

The change in focus comes as sales momentum builds for the company's hydrogen-fuel-cell truck. Nikola said that as of Tuesday, it had received orders for 140 hydrogen-fuel-cell trucks from 12 different customers. As of Tuesday, the company had completed the first two of 10 gamma hydrogen-fuel-cell trucks, with the remaining eight scheduled to be completed by the end of June.

"We remain on track to begin hydrogen-fuel-cell serial production in July," the company said.

The stock has plunged 59.3% year to date, while the Global X Autonomous & Electric Vehicles exchange-traded fund (DRIV) has rallied 13.4% and the S&P 500 has gained 7.4%.

-Tomi Kilgore

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05-09-23 1212ET

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