What happened
Shares of Chinese electric vehicle (EV) maker Kandi Technologies (KNDI -4.50%) were trading sharply lower on Tuesday, after the company reported that its sales and margins had declined, and its loss widened, in the third quarter from a year ago.
As of 10:45 a.m. EST, Kandi's shares were down about 16.3% from Monday's closing price.
So what
Kandi reported its third-quarter results before the U.S. markets opened on Tuesday, and investors hoping for growth were mostly disappointed.
The good news was that sales of electric scooters brought in $6.3 million, versus just under $1 million in the third quarter of 2020.
As for the bad news in year-over-year results, there's a list:
- Total revenue of $16.8 million was down 10.3%.
- Sales of EV parts totaled $3.2 million, versus $8.4 million.
- Off-road vehicle sales totaled $6.8 million, versus $8.9 million.
- Gross margin fell to 16.4% from 20.9%.
- Net loss widened to $0.10 per share from $0.03 per share.
While CEO Hu Xiaoming was understandably eager to talk about "surging" sales of Kandi's electric scooters, the grim reality was that the rest of the business had a tough quarter. That's why the stock was falling on Tuesday morning.
Kandi's K23 is a small electric car with a starting price around $22,500. Sales have not been brisk. Image source: Kandi Technologies.
Now what
Unlike with most electric vehicle stocks, there are very few Wall Street analysts covering Kandi. Thomson Reuters reported that just one analyst responded to its pre-earnings survey, and that analyst expected Kandi to report revenue of $38.8 million -- more than twice its actual result.
Kandi obviously missed that estimate by a wide margin, but it was the lack of growth in the actual results -- not the "miss" -- that was driving the stock lower on Tuesday.
