Chinese electric-vehicle maker NIO (NIO -5.43%) reported today that it lost less money than expected in the third quarter, as cost improvements helped boost profit margins in a quarter in which NIO sold more vehicles than ever before.
NIO's net loss for the quarter was $154.2 million, or $0.14 per American depositary share, on total revenue of $666.6 million. That was a significant improvement over its results in the third quarter of 2019, and good enough to beat estimates: Wall Street analysts polled by Thomson Reuters had expected a loss of $0.17 per share on revenue of $653.73 million.
NIO sold 12,206 of its upscale electric vehicles in the third quarter, its highest-ever quarterly total, as China continued to rebound from the coronavirus outbreak earlier this year and Chinese consumers continued to flock to "new energy vehicles." At the same time, chief financial officer Steven Wei Feng noted, NIO benefited from improved cost controls and the greater economies of scale on higher production volumes.
The result was NIO's second consecutive quarter of positive cash flow, Feng said. The company's gross margin increased to 12.9% in the quarter, versus 8.4% in the second quarter and negative 12.1% in the third quarter of 2019.
Feng said that the company's order book has remained strong since the third quarter ended on Sept. 30. He expects NIO's sales to increase again in the fourth quarter, to between 16,500 and 17,000, generating revenue between $922 million and $948 million.
As of 4:30 p.m. EST on Tuesday, NIO's American depositary shares were down about 3% in after-hours trading. NIO will hold a conference call to discuss the results at 7 p.m. EST.