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Three electric vehicle (EV) startups that went public via special purpose acquisition companies (SPAC) recently fell short of their projected 2022 goals. According to reports, EV companies Lucid Group Inc (NASDAQ: LCID), Nikola Corp (NASDAQ: NKLA), and Lordstown Motors (NASDAQ: RIDE) all had a disappointing 2022.
The trio missed their EV goals by significant margins, with Lucid and Lordstown Motors suffering considerable deficits in production objectives. In perspective, Lucid accomplished just over a third of its production agenda for the year at 7,180 Air sedans. The California-based EV maker had been gunning to produce 20,000 vehicles in 2022. Meanwhile, Lordstown Motors could only manage the production of 31 Endurance pickups in the same period. This number pales compared to the 500-vehicle output that the Ohio-based EV automaker had in mind.
Nikola also delivered an underwhelming number of 131 Tre heavy-duty trucks. This number was roughly a quarter of the 500 vehicles the Phoenix-based company had envisaged for its 2022 production line.
Following their less-than-stellar 2022 EV production outing, Lucid, Nikola, and Lordstown see the odds improving little in 2023.
Lucid’s shares nosedived following the company’s restrained production forecast of 14,000 vehicles this year. The EV maker’s shares slumped by more than 14% in Thursday’s early trading session after Lucid hinted at waning demand. According to Visible Alpha, analysts had expected production of just under 22,000 vehicles by Lucid this year.
In addition, the electric vehicle manufacturer also acknowledged it was locked in a price war with electric vehicle heavyweights Tesla (NASDAQ: TSLA). Tesla and Ford Motor Company (NYSE: F) have embarked on aggressive price cuts to induce higher demand amid a faltering tech sector. However, these cuts also make it harder for less illustrious rivals like Lucid and Rivian Automotive Inc (NASDAQ: RIVN) to eke market share.
BofA Global Research downgraded Lucid stock from a “buy” to “neutral.” The research firm also added that considering operations and free cash flow, the company might not break even until 2027.
EMG Advisors chief executive officer Will McDonough also commented on the plight of Lucid’s earnings, saying:
“Lucid’s earnings sadly show that it’s a business that’s in the public markets earlier than it should be. Now that the markets are less fluid, investors are focused on the fact that this company only produced 7,000 cars in 2022.”
Nikola’s stock also declined after the EV company announced projected deliveries of no more than 375 trucks. Meanwhile, Lordstown Motors’ shares also slipped after the EV maker announced the suspension of production and customer deliveries in January. According to Lordstown Motors, it paused output and customer deliveries because of performance and quality issues.
Lordstown slumped 15%, while Nikola stock declined 9% in yesterday’s New York trading session. Nikola’s shares initially dropped 1.3% following a quarterly earnings miss.
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.
Consumer goods heavyweight Procter & Gamble saw its fiscal Q2 2023 earnings slip but maintained a higher organic fiscal sales growth.
Procter & Gamble (NYSE: PG) recently reported declining revenue and profit in its fiscal Q2 2023 earnings statement. On Thursday, the American multinational consumer goods corporation reported total revenue of $20.77 billion. This figure came slightly lower than the consensus estimates of $20.73 billion in P&G’s fiscal second quarter. The company also realized adjusted earnings per share of $1.59, which is on par with analysts’ expectations. A year earlier, P&G gained $1.66 in adjusted earnings per share.
The latest Procter & Gamble fiscal Q2 2023 earnings report also saw the consumer goods giant rake in a net income of $3.9 billion, excluding items. This is less than the $4.22 billion the company made in the fiscal second quarter of last year.
P&G’s latest year-over-year (YoY) decline in earnings comes as the organization hoped to rely on higher prices to offset declining sales. However, this strategy turned out differently than expected, with P&G’s reported December 10% product price increase cutting sales volumes instead. P&G’s sales volumes slumped 6%, the most significant quarterly drop in years. In addition, the leading consumer goods company also experienced substantial foreign exchange headwinds for the given period.
All of Procter & Gamble’s divisions reported waning sales volumes in the 2023 fiscal second quarter. This unsavory development came about despite experiencing increases in organic sales due to the higher pricing.
Despite fiscal Q2’s gloomy sales volume, P&G slightly raised its outlook for organic fiscal 2023 sales growth to between 4% and 5%. This range previously stood at 3% to 5%.
Procter & Gamble’s chief executive officer, Jon Moeller, believes that against all odds, the company “delivered solid results in the second quarter of the fiscal year 2023 in what continues to be a very difficult cost and operating environment.” In addition, Moeller suggested that P&G continues to take a grounded approach to all its operational decisions for 2023. As he put it:
“The world seems to want everything to be better, as do I. That’s really not the reality… It’s not the time to be taking guidance to the top range of possibility.”
P&G finance chief Andre Schulten also echoed some of Moeller’s sentiments, explaining that the company remains on track. Schulten touched on the company’s sales volume declines, revealing that P&G had anticipated the drop. Furthermore, he explained that half of this decline was due to a combination of factors. These factors include P&G halting sales of most items in Russia and retailer inventory cutbacks in the US, Europe, and China.
P&G executives maintain their goal of performing a few percentage points better than the market. In addition, Schulten said that shoppers remain willing to pay more for high-end items. He further stated that a significant number of shoppers also seek out deals, and demand is up for both small and large products. According to Schulten, people do not stop doing their laundry or washing their hair.
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.