What happened
Shares of Niu Technologies (NIU 0.97%) plunged Monday after the Chinese electric scooter maker announced its third-quarter financial results. Niu is working to take advantage of the many large metro areas in China, as well as the attraction many citizens have to electric vehicles.
However, after its latest report, Niu shares fell nearly 18% Monday morning. As of 1:50 p.m. ET, the stock was still lower by 14%.
So what
While the company sold more than 320,000 e-scooters in the quarterly period, that was down more than 19% year over year. International sales rose significantly, but more than 80% of the company's units were sold in its home market. Those China sales decreased 33% compared to the prior-year period. It seems the COVID-19-related restrictions and lockdowns are affecting the company right now.
Image source: Getty Images.
Now what
Niu's net income also dropped significantly versus last year. It still earned a profit of about $400,000, but that's compared to nearly $13 million in the year-ago period. In addition to maintaining profitability, the company held about $205 million in cash and equivalents as of Sept. 30.
With COVID-19 cases and related restrictions in China continuing to cause disruptions, the company doesn't see a recovery coming in the fourth quarter. It said revenue could range from being flat sequentially from the third quarter to decreasing as much as 20%. Investors are reacting to that uncertainty by selling shares in the e-scooter company today.
