updraftplus domain was triggered too early. This is usually an indicator for some code in the plugin or theme running too early. Translations should be loaded at the init action or later. Please see Debugging in WordPress for more information. (This message was added in version 6.7.0.) in /home/aonyeani76/cryptocurrencypanther/wp-includes/functions.php on line 6131hustle domain was triggered too early. This is usually an indicator for some code in the plugin or theme running too early. Translations should be loaded at the init action or later. Please see Debugging in WordPress for more information. (This message was added in version 6.7.0.) in /home/aonyeani76/cryptocurrencypanther/wp-includes/functions.php on line 6131wpforms-lite domain was triggered too early. This is usually an indicator for some code in the plugin or theme running too early. Translations should be loaded at the init action or later. Please see Debugging in WordPress for more information. (This message was added in version 6.7.0.) in /home/aonyeani76/cryptocurrencypanther/wp-includes/functions.php on line 6131China’s Xpeng shares were trading lower in US pre-trade after the EV company forecast significantly lower vehicle deliveries for Q2.
The shares of Chinese electric vehicle (EV) giant XPeng Motors (NYSE: XPEV) slid 5% following missed Q1 earnings and a gloomy delivery forecast.
Xpeng shares sank in US pre-market trade after the company reported a 50% year-over-year (YoY) decline in Q1 revenue. The company raked in income of 4.03 billion Chinese yuan ($571.6 million) compared to the 5.19 billion yuan analysts expected. For the first quarter of 2023, the Chinese Tesla rival also sustained a net loss of 2.34 billion yuan versus the 1.9 billion expected. Xpeng’s latest quarterly deficit exceeded the 1.7 billion yuan loss suffered in the same quarter last year.
Xpeng Chairman and Chief Executive Officer He Xiaopeng weighed in on the company’s quarterly performance, saying:
“During the first quarter of 2023, I made changes to our strategy, organizational structure, and senior management team decisively. I am fully confident in taking our company into a virtuous cycle, driving product sales growth, team morale, customer satisfaction, and brand reputation over the next few quarters.”
With shares currently trading at $9.11, Xpeng forecast at most 22,000 vehicle deliveries in Q2. The company’s latest restrained delivery guidance of between 21,000 and 22,000 EVs represents a 36.1% to 39.0% YoY decrease. Additionally, Xpeng’s second-quarter forecast revenue of between 4.5 billion yuan and 4.7 billion yuan is a 36.8% to 39.5% YoY drawdown.
However, He remained optimistic about the company’s prospects, especially regarding its soon-to-be-released G6 SUV. The EV rolls off the assembly line next month, and the Xpeng CEO believes it will become a popular, best-selling model in China.
Meanwhile, Xpeng Honorary Vice Chairman and Co-President Hongdi Brian Gu stressed the company’s commitment to achieving sustained profitability in a saturated market. Gu said:
“[As we advance], our top priority remains to accelerate growth in sales and market share. As the upcoming G6 launch and other new product launches fuel rapid sales growth, we expect our cash flow from operations to improve significantly.”
Xpeng’s recent less-than-stellar performance is due to debilitating macroeconomic parameters in China. This includes mixed consumer spending in an uneven economy still recovering from stringent Covid protocols. In addition, the Guangdong-based EV maker has also ceded some market share to rising competition from other EV companies. Xpeng’s competitors range from local to international, including China’s BYD, Li Auto, Nio, and the US Tesla (NASDAQ: TSLA).
Although Tesla recently hiked the prices of some of its EV models, the company’s previous price cuts impacted Xpeng’s competitiveness.
In early February, Xpeng launched its flagship electric vehicle models in Europe amid intensifying competition at home and abroad. The overseas push is to increase the Chinese company’s brand visibility and eke out a potentially lucrative foreign market share.
On February 3rd, Xpeng launched its P7 sedan and G9 SUVs in Denmark, Netherlands, Norway, and Sweden. At the time of the Europe launch, the Chinese EV manufacturer priced its P7 sedan below Tesla’s EVs.
Tolu is a cryptocurrency and blockchain enthusiast based in Lagos. He likes to demystify crypto stories to the bare basics so that anyone anywhere can understand without too much background knowledge.
When he’s not neck-deep in crypto stories, Tolu enjoys music, loves to sing and is an avid movie lover.
In its Q1 2023 report, Swedish telecom giant Ericsson described India as a viable market that drove sales up fivefold.
Ericsson (NASDAQ: ERIC) recently reported its Q1 2023 earnings which beat expectations and revealed a boost in quarterly profit. On Tuesday, the Swedish telecom giant first-quarter core earnings benefited from increased sales of 5G equipment in countries like India. Ericsson’s net sales grew 14% in the first three months of 2023, surpassing the consensus estimate of 60.43 billion. However, the company experienced a sales slump in more established territories such as the US, which eroded margins.
Ericsson Chief Financial Officer Carl Mellander described India as a “strong and a good example where our sales are up five times”. He also added that the Southern Asian nation is the telecom company’s second-largest market after the US. Although India was responsible for increased Ericsson equipment sales, analysts opined that net growth primarily benefited from a massive company acquisition. Ericsson completed its takeover of US-based cloud communications provider Vonage Holdings Corp in July last year in a deal worth $6.2 billion. At the time, the Swedish multinational networking powerhouse said the partnership would strengthen its offerings to businesses across the globe. Furthermore, Ericsson President and Chief Executive Officer Börje Ekholm added then:
“We will continue to create new, enhanced applications and services for enterprises while driving continued innovation on Vonage’s UCaaS and CCaaS applications, helping businesses create new digital experiences for better communications, connections, and engagement.”
During its Q1 2023 outing, Ericsson cut costs to negate lower customer spending in several regions. However, the Stockholm-based company expects this slower-paced customer spending to last until the third quarter. Furthermore, after its significant layoff announcement in February, Ericsson hopes to save an additional 2 billion crowns ($193 million) in costs.
Although Ericsson experienced pronounced sales growth in the first quarter, the company’s gross margin slumped to 38.6% from 42.3%. Furthermore, Ericsson’s adjusted operating earnings for the quarter, minus restructuring, slipped to 4 billion Swedish crowns from 4.8 billion crowns year-over-year (YoY). Nonetheless, Ekholm remains focused on its long-term operational agenda. In a statement, Ekholm explained:
“We are on a journey to shape the future industry landscape and extend our addressable market by leveraging our 5G capabilities. We continue to execute on our strategy to strengthen our leadership in Mobile Networks, grow our enterprise business, and drive continued cultural transformation.”
Previously, Ericsson stated that inflationary pressure remained high despite the abatement of supply-chain-related challenges. However, the company plans to remain competitive and profitable by navigating near-term headwinds via commercial initiatives.
Last month, Ericsson agreed to pay $206.7 million as a settlement with the US Justice Department for allegedly breaching a 2019 deferred prosecution agreement. Despite the payment, the Swedish company remains under investigation by the Justice Department and Securities and Exchange Commission (SEC) for corruption-related offenses. Both government agencies are investigating Ericsson for alleged corruption and terrorist financing in Iraq. The outcome of the investigation could invoke additional penalties.
Tolu is a cryptocurrency and blockchain enthusiast based in Lagos. He likes to demystify crypto stories to the bare basics so that anyone anywhere can understand without too much background knowledge.
When he’s not neck-deep in crypto stories, Tolu enjoys music, loves to sing and is an avid movie lover.
The broader tech selloffs impacted the Vision Fund Q4 2022 performance over the past year since the fund has stakes in several tech companies.
The SoftBank Vision Fund has posted its Q4 2022 earnings report, revealing a fourth consecutive quarterly loss. The Japanese banking giant’s latest quarterly plunge is due to the broader tech slump across the board.
SoftBank’s flagship Vision Fund investment arm posted a Q4 pre-tax loss of 660 billion Japanese yen, or $5 billion. In addition, the Vision Fund’s loss on investments for the period ended December 31st was 730.35 billion yen. Overall, the SoftBank Group sustained a net loss of 783.4 billion yen, with The Vision Fund dragging it back to a quarterly loss after recording a profit in Q3.
The underperformance underscores the current trying times experienced by the SoftBank Vision Fund. The London-based venture capital fund has investments in various tech companies, including startups and more established powerhouses, which caused a direct hit to the VC’s bottom line following the sustained tech sector selloff over the past year. Some of SoftBank’s worst-hit investments were Chinese AI firm SenseTime and Indonesian technology group GoTo. The duo has experienced up to 60% stock drawdowns over the past year.
SoftBank ascribed some of its more significant Q4 losses to an “overall decrease in the fair value of portfolio companies.” According to the Japanese investment management holding company, this value decrease also reflected markdowns of poorer-performing companies and share price drawdowns in market comparable companies.”
Following the latest abysmal performance by the Vision Fund for Q4 2022, SoftBank’s founder Masayoshi Son provided insight into shaping future operations. According to Son, who also masterminded the Vision Fund, the venture capital fund would go into “defense” mode. In addition, Son also said that SoftBank’s Vision Fund would apply conservationism with the pace of investments following its record $27 billion loss for the last fiscal year.
Son skipped the company’s earnings call, which did not go over well with investors, following the weak quarterly performance. However, SoftBank chief financial officer Yoshimitsu Goto moved to reassure investors of the bank’s prospects and stability. Expounding on Son’s cautious approach to the company moving forward, Goto added:
“What’s most important is to take a conservative approach in evaluating the current environment. I’m still working on making better presentations.”
Goto also explained that the SoftBank Group had enough cash to go on the offensive once again if the right circumstances apply.
Vision Fund senior executive Navneet Govil also argued that SoftBank could rely on several strong companies in its portfolio. Therefore, Govil remains confident that the company will thrive while the environment recovers. He also revealed that the group’s more mature startups presently yield an estimated $37 billion of fair value. According to Govil, these funds would be deployable upon reopening the markets.
Also echoing Son and Goto’s stance on a conservative approach, the Vision Fund senior executive said:
“Significant unpredictability remains in the labor markets, future monetary policy road map, as well as corporate earnings. Our posture remains defensive, and we’re focused on building resilience.”
SoftBank was founded in September 1981 and launched the Vision Fund VC in 2017.
Tolu is a cryptocurrency and blockchain enthusiast based in Lagos. He likes to demystify crypto stories to the bare basics so that anyone anywhere can understand without too much background knowledge.
When he’s not neck-deep in crypto stories, Tolu enjoys music, loves to sing and is an avid movie lover.
Although Li Auto realized a substantial revenue increase for Q3 2022, the company’s operating costs also rose.
Li Auto Inc (NASDAQ: LI) recently posted its Q3 2022 earnings report, which revealed a wide quarterly deficit despite a 20% increase in revenue. For the third quarter, the Chinese electric vehicle manufacturer raked in revenue of $1.31 billion but missed the consensus estimate by $60 million. Li Auto’s vehicle sales surged 23% on higher average selling prices, with the delivery of some models beginning in late August. However, the EV maker also incurred more expenses on developing these new car models for the period ending September 30th. The company’s total vehicle deliveries for the third quarter were 26,524 units, representing a 5.6% increase year-over-year (YoY) increase.
As it stands, the 73% jump in operating costs for Li Auto erodes its stronger sales outing. The Beijing-headquartered EV manufacturer attributed its third-quarter expense increase to higher research and development costs. Most auto manufacturers have incurred rising material expenses due to the global semiconductor (chip) shortage. Nonetheless, Li Auto stated that it anticipated a production scale-up and higher deliveries due to easing global supply chain constraints.
Li Auto’s operating expenses more than doubled on a higher headcount. In addition, the electric vehicle maker also sustained a more extensive net loss in Q3 2022. This deficit grew from 21.5 million yuan a year earlier to a staggering 1.65 billion yuan, or $236.8 million.
Meanwhile, Li Auto’s gross margin sank to 12.7% in the third quarter from 23.3% in the year-ago quarter. The company’s latest gross margin figure also reflects a sizable drawdown from the 21.5% it stood at in the second quarter of this year.
Despite the unsavory development in Li Auto’s financial report for Q3 2022, the company’s chief financial officer, Tie Li, remains upbeat. Providing an assessment of Li Auto’s operational projections, Li explained:
“Looking ahead, we are optimistic that with rapid production ramp-up, rigorous execution, and responsible cost management, we will realize greater economies of scale and further drive down costs, putting us back on track to hit our profitability inflection point.”
Although Li admitted that Li Auto weathered a “challenging macro environment and cost inflation,” the company’s Q4 guidance remains strong. According to the Chinese EV manufacturer, vehicle deliveries for the fourth quarter could be between 45,000 and 48,000 cars. In perspective, this guidance represents an increase of 27.8% to 36.3% from last year’s fourth quarter. Furthermore, this suggested production ramp-up could also net Li Auto a 65.8% increase in revenue of between 16.51 billion yuan and 17.61 billion yuan.
Whether Li Auto will achieve its Q4 delivery target remains to be seen. However, the EV manufacturer is fast closing in on the total number of vehicles dispatched for the third quarter. Its combined number of deliveries made since October currently tops 25,000 units.
At the end of the third quarter, Li Auto had 271 retail stores across 119 cities. In addition, the company also operated 316 servicing centers and authorized body and paint shops in 226 cities.
Read more business news here.
Tolu is a cryptocurrency and blockchain enthusiast based in Lagos. He likes to demystify crypto stories to the bare basics so that anyone anywhere can understand without too much background knowledge.
When he’s not neck-deep in crypto stories, Tolu enjoys music, loves to sing and is an avid movie lover.