Nikola's stock drops as revenue drops to less than half of what was expected

Nikola Corp.'s shares experienced a decline in premarket trading on Tuesday, relinquishing a brief surge, subsequent to the electric-truck manufacturer's disclosure of first-quarter revenue figures that fell significantly short of expectations, offsetting a narrower-than-anticipated loss.

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Steve Girsky, Chief Executive of Nikola, emphasized the company's commitment to swift progress and operational implementation, stating, "We continue to move forward rapidly and execute our plans. And please keep that in mind — we are in the execution phase, not the planning or concepting phase."

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Following the release of Nikola's report, its stock (NKLA) initially surged by as much as 4.7% in the initial minutes, only to swiftly reverse its trajectory, ultimately registering a 4.7% decline in recent premarket trading.

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The company's net losses narrowed to $147.7 million, or 11 cents per share, from $169.1 million, or 31 cents per share, in the corresponding period of the previous year. Adjusting for nonrecurring items such as stock-based compensation and losses related to equipment purchase cancellations, the adjusted per-share loss of 9 cents surpassed the FactSet loss consensus of 10 cents.

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However, revenue witnessed a notable decline of 25.4%, amounting to $7.50 million, significantly below the FactSet consensus projection of a 47.8% increase to $15.78 million.

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The production of trucks saw a decline of 32% to 43 units, while the number of trucks shipped increased by 29% to 40 units.

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Moreover, the cost of revenue surged by 95% to $65.07 million, resulting in a deterioration of gross margin to negative 768% from negative 213%.

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Nikola highlighted that by the end of the first quarter, it surpassed its guidance by delivering 40 fuel-cell electric vehicles (FCEVs), bringing the total number of wholesaled FCEVs to 75 in the first two quarters of production.

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"We're seeing green shoots with repeat and new fleets, some in new markets such as N.Y.," the company stated. "While our initial focus has been Calif. and Canada, we can expand our reach to meet the demands of end fleet users virtually anywhere in the U.S."

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Despite these developments, Nikola's stock has experienced a year-to-date decline of 27.1% through Monday, contrasting with the 8.6% gain observed in the S&P 500 index.

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