Shares of Chinese electric vehicle (EV) maker Kandi Technologies (KNDI 0.10%) 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.
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.
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.