Rivian's Q1 Earnings Coming Up: What's in Store?

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Rivian Automotive (RIVN - Free Report) is scheduled to report first-quarter 2022 results on May 11, after the closing bell. The Zacks Consensus Estimate for the quarter’s loss and revenues is pegged at $1.50 per share and $113.6 million, respectively. The consensus mark for Rivian’s first-quarter loss per share has widened by 6 cents over the past 30 days.

The electric vehicle (EV) start-up went public in November 2021. This will be the third time that the company will unveil quarterly results after making its Nasdaq debut. Over the trailing two quarters, RIVN surpassed earnings estimates once and missed on the other, the average negative surprise being 9.12%. In the last reported quarter, Rivian incurred a loss per share of $2.43, wider than the Zacks Consensus Estimate of a loss of $1.58. Total revenues came in at $54 million, beating the consensus mark of $50 million. 

Factors Shaping Q1 Results

In the first quarter of 2022, Rivian produced 2,553 vehicles at its manufacturing facility in Illinois. The company delivered 1,227 vehicles during the first three months of 2022 and believes that it is on track to meet its forecast of selling 25K units this year. But impediments to the supply chain compounded by the Russia-Ukraine war and the resurgence of coronavirus in China would have induced lost sales volumes in the to-be-reported quarter.

Additionally, RIVN — being in the nascent stage of development — has been burning cash. In the last reported quarter, Rivian’s research & development (R&D) costs roughly tripled from the year-ago levels, while selling, general & administrative (SG&A) expenses increased nearly sevenfold from the corresponding quarter of 2020. Operating expenses were $2,071 million, flaring up from $353 million incurred in the comparable year-ago period. Massive operating costs for the first quarter, stemming from advanced product-development activities are likely to have dented margins. Also, high capex to support additional manufacturing capacity and infrastructure is likely to have clipped cash flows. This gets more glaring, especially when the company is not generating meaningful revenues.

The overall results of Rivian are likely to be weighed down by supply chain snarls, manufacturing inefficiencies, and high operating costs and capex requirements.

Earnings Whispers

Our proven model does not conclusively predict an earnings beat for Rivian this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat, which is not the case here.

Earnings ESP: Rivian has an Earnings ESP of -8.38%. This is because the Most Accurate Estimate of loss is pegged 13 cents wider than the Zacks Consensus Estimate. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Rivian currently carries a Zacks Rank of 3.