Finance
Rivian reports mixed first quarter results, but cuts investment forecast and sees a ‘gross profit’ in fourth quarter
Rivian (RIVN) reported mixed quarterly results for the first quarter, but will achieve further cost savings by moving upcoming R2 production to its Normal, Illinois plant and lowering capital expenditure forecasts. The EV maker also reaffirmed its full-year loss forecast and still sees a “pathway” to “modest gross profit” in the fourth quarter of this year.
For the quarter, Rivian reported revenue of $1.204 billion versus $1.175 billion expected, which is an 80% increase from a year ago. However, Rivian posted earnings per share of $1.45 versus an estimated loss of $1.27, with an operating loss of $1.484 billion compared to an expected loss of $1.299 billion.
Rivian reaffirmed its adjusted EBITDA loss forecast of $2.70 billion for 2024, but now sees its capital expenditure (capex) improving to $1.2 billion, compared to $1.75 billion previously as a result of moving the start of the R2 production to its Normal, IL facility, with further capital savings seen in 2025 and 2026.
Rivian shares were trading higher hours before the release of its first-quarter results, but fell about 4% after the results were released.
“We achieved several milestones this quarter, including production of our 100,000th vehicle in Normal, successfully navigating the retooling upgrade and unveiling our new midsize platform that powers the R2, R3 and R3X,” said CEO RJ Scaringe in a statement.
The company also said that as a result of the redesign and other improvements, Rivian “remains confident on its path to achieve modest gross profit in the fourth quarter of this year.”
By moving R2 production to its existing U.S. factory instead of the new Georgia facility, Rivian said Tuesday that the move will save the company more than $2.25 billion. The company now sees its normal capacity following the launch of the R2 and factory changes to a total annual capacity of 215,000 units across all vehicles, including up to 155,000 units of the R2.
In terms of cash buffer, Rivian said it had $5.98 billion at the end of the first quarter, compared to $7.86 billion at the end of the fourth quarter.
Last month, the company reported first-quarter R1T and R1S production of 13,980 and deliveries of 13,588, beating expectations of about 12,400 units. The company also confirmed production expectations of 57,000 vehicles in 2024.
Part of cutting these costs came in the form of a 10% workforce reduction, with the company citing economic uncertainty. While reaffirming its forecast to achieve “modest gross profit” by the end of 2024, Rivian did not repeat previous statements that it was “very close” to achieving a positive contribution margin by the end of 2023.
Earlier this year, Rivian said development of the Georgia plant has been put on hold for the time being, despite Georgia Governor Brian Kemp’s decision Rivian CEO RJ Scaringe reaffirmed the company did not give up on the project.
Scaringe said that once the R2 was ready for a larger rollout, the upcoming facility in Georgia would handle the rollout. The company also said it would launch its R2 in Europe, which would be a huge market for the company as it does not currently sell its larger R1 vehicles on the continent.
Pras Subramanian is a reporter for Yahoo Finance. You can follow him Tweet and further Instagram.
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