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Investing.com -- Li Auto shares fell in U.S. premarket trading on Wednesday after the company posted a worse-than-expected third-quarter earnings and issued a weak outlook for the current quarter.
The automaker’s shares were down 1.8% by 04:18 ET.
Li Auto reported earnings per share (EPS) of RMB0.36, falling short of analyst forecasts of RMB0.64, while revenue reached RMB27.36 billion, slightly ahead of consensus estimates.
Third-quarter deliveries dropped 39% from a year earlier to 93,211 units. Vehicle sales fell to RMB25.9 billion, down 37.4% year-over-year and 10.4% sequentially.
Vehicle margin narrowed to 15.5%, compared with 20.9% a year earlier, or 19.8% when excluding estimated recall-related costs for the Li MEGA. Gross margin slipped to 16.3% from 21.5% in the prior-year quarter, or 20.4% when adjusted for recall impacts.
Operating margin turned negative at 4.3%, reversing both last year’s 8% margin and the 2.7% seen in the second quarter.
“Our BEV portfolio gained strong momentum during the third quarter, demonstrating our top-tier product-definition capabilities and solid product strength. Orders for Li i8 and Li i6 have exceeded 100,000 in aggregate," said Xiang Li, chairman and CEO of Li Auto.
"On the AI front, our VLA Driver large model, empowered by world model and reinforcement learning, has achieved industry-leading user adoption with monthly usage rate reaching 91% in October," he added.
“While navigating intensifying market competition, we faced headwinds in the third quarter from supply chain bottlenecks and costs related to the recall of Li MEGA. We have been proactively working with our supply chain partners to fulfill the demand of our users for Li i8 and Li i6," said Tie Li, chief financial officer of Li Auto.
Looking ahead, Li Auto forecasts fourth-quarter revenue of RMB26.5 billion to RMB29.2 billion, well below analyst expectations of RMB36.99 billion.
Deliveries are projected at 100,000 to 110,000 vehicles, a year-over-year decline of 37% to 30.7%.