XPeng Earnings Beat Expectations. Its Stock Is Dropping.

4 weeks ago 7
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A Xpeng P7 car is seen during the 19th Shanghai International Automobile Industry Exhibition in Shanghai on April 19, 2021.

Hector Retamal/AFP via Getty Images

  XPeng stock was dropping after the Chinese electric car maker beat earnings projections.

XPeng (ticker: XPEV) shares were down about 2.5% in premarket trading Thursday, while S&P 500 futures were down about 0.1%, and Dow Jones Industrial Average futures were up about 0.1%.

It’s actually a small drop for XPeng considering how much its stock usually moves after earnings. Shares have moved about 13%, up or down, on average following the past four quarterly earnings reports.

XPeng reported a per shares loss of 21 cents from $583 million in sales. Analysts were looking for 22 cent loss from $552 million in sales.

The company delivered 17,398 vehicles during the second quarter. Gross profit margins—an important metric for a new company not yet making bottom line profits—came in at 11.9%. Analysts projected 11.3% for the second quarter.

The company feels good about results. “Our outstanding second quarter 2021 results reflect XPeng’s leadership in China’s booming Smart EV industry where we continue to introduce innovative technology, differentiated products and premium services,” said President Dr. Hongdi Brian Gu in the company’s news release.

Looking ahead, XPeng expects to deliver about 22,000 vehicles in the third quarter and generate sales of about $756 million, better than the $658 million analysts are projecting. XPeng is making cars out of one plant which is operating near its capacity. The company is planning to double capacity at that plant by early 2022.

It looks like a solid quarter. Still, XPeng stock is down about 5% year to date. Rising interest rates—which hurt richly value high growth companies more than others—as well as a semiconductor shortage constraining global auto production and a selloff in Chinese stocks has hurt shares in 2021. Still, the stock has gained recently, rising almost 30% over the past three months.

Write to allen.root@dowjones.com

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