Rivian (RIVN) released its fourth-quarter and full-year earnings results for 2022 after the market closed on Tuesday, February 28, showing a slight loss of revenue but significantly lower operating expenses as the startup of electric vehicles move to cut costs and drive volume.
Rivian EV earnings and sales expectations
CEO RJ Scaringe previously said it was a “challenging year” for Rivian as it ramped up production through supply chain issues and product recalls.
Rivian disclosed last month that it had produced 10,020 electric vehicles at its Normal, Illinois plant during the fourth quarter and delivered 8,054 during the same period.
For the full year, Rivian produced 24,337 EVs and delivered 20,332, falling just shy of its 25,000 targets. Despite the glitch, Rivian’s production continues to grow at an impressive rate, producing just 1,015 vehicles in total. at the end of 2021.
Wall Street expects Rivian to report fourth-quarter revenue of $742 million, up from $536 million in the third quarter, and EPS of ($1.94).
For delivery and production guidance, Wall St expects 60,000 to 65,000 models by 2023.
Rivian Q4 2022 Financial Results
After the market closed, Rivian launched its fourth quarter financial results which show that the company is implementing cost reduction procedures.
However, as Rivian explains, the company’s cost of goods sold was affected by short-term premiums on materials and expedited freight charges, which it expects will continue to negatively impact gross margins.
Rivián reported:
- Revenue: $663 million compared to $742 million expected
- EPS: ($1.73) vs. ($1.94) expected
Revenue increased 23% to $663 million compared to $536 million in the third quarter. Operating costs fell to $795 million in the fourth quarter from more than $2 billion last year.
Rivian generated a negative gross profit of $1 billion in the fourth quarter, which was affected by lower cost or net realizable value (LCNRV). In total, Rivian posted a net loss of $1.7 billion, a decrease of $2.4 billion on the same period last year and about the same as the third quarter of 2022.
Rivian finished the quarter with more than $12 billion in cash and cash equivalents after spending $1.4 billion in the fourth quarter.
Takeaways from Rivian’s fourth-quarter earnings report
Entering Tuesday, shares of Rivian (RIVN) are down 70% in the past 12 months. The after-hours reaction shows disappointment, with RIVN dropping a further 8%.
One of the most important things is orientation; Wall St had hoped for about 10,000 more deliveries in 2023, but Rivian is sticking to a modest goal. Rivian’s cost-cutting initiatives are working, but investors want to see more of the company’s top line.
The company has enough cash to navigate the next phase of its EV rollout, it will stick to execution and stay frugal on its spending. Rivian says it will introduce a new battery pack that uses LFP cell chemistry to expand its available supply and further reduce costs.
