Rivian Q2 earnings forecast: Cost control, profit outlook, and VW focus

Rivian will provide investors with a second quarter update on its financials as the toy EV maker aims to ramp up its production as it prepares for the mass release of its EV within the next few years. two.

For the quarter, Rivian is expected to report revenue of 1.165 billion dollars, according to a Bloomberg consensus, a huge jump of 76% from last year. The revenue stream will not translate into profit at this time, and the company is expected to report an adjusted loss per share of $1.20, with an adjusted net loss of $1.194 billion. Operating profit is expected to worsen slightly, with a loss of $1.371 billion and an EBITDA of $892.3 million negative.

Last quarter, Rivian confirmed its adjusted EBITDA loss forecast of $2.7 billion for 2024 but now sees its capital expenditure improve to $1.2 billion from the $1.75 billion seen. earlier. Rivian says this is because the company has moved the start of R2 production at its Common, Ill., plant, with other reserves expected in 2025 and 2026. Investors will be watching to see if these estimates of losses are improved for the annual rate.

Investors will also keep an eye out for any updates on Rivian’s full-year earnings metrics. In its Q1 report the company said that as a result of its equipment upgrade and other improvements, Rivian is still “confident on its way to achieving lower profitability in the fourth quarter of this year.”

Improvements in equipment maintenance had an impact on Rivian’s Q2 shipments. Last month the company said it produced 9,612 vehicles at its Normal assembly plant and delivered 13,790 vehicles. Both numbers were down compared to the 13,980 reported and 13,588 reported in Q1. Rivian said its Q2 production and logistics will be “choppy” due to factory shutdowns required for retooling.

Rivian’s updated R1T and R1S models could be a new sales driver, along with continued aggressive lease financing for its vehicles. Those new cars were available to order starting in June, the company said.

This may cause Rivian to confirm its guidance for the annual production of 57,000 vehicles, despite the drop in Q2 of vehicles produced.

Raising the level of Rivian money

Rivian said that the last quarter had $ 5.98 billion compared to $ 7.86 billion at the end of Q4. Part of the savings and cost reductions came in the form of another workforce reduction of about 1%, following a 10% reduction in employee wages in Q1 that Rivian attributed to the uncertainty of the economy.

A major boost to Rivian’s financial position came in June in the form of a business partnership with Volkswagen, which announced plans to work with Rivian to develop “future software-defined vehicle (SDV) designs that will be used in the future of both companies EVs.

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In exchange, Volkswagen will invest an initial $1 billion in Rivian in an “unsecured convertible note that will convert into Rivian common stock,” with up to $4 billion in additional investments made in until 2026 for an infusion of $ 5 billion.

For Rivian, news of the new capital eases concerns about the company’s runway as it approaches the release of its next-generation vehicles, the R2 and R3 mass-market SUVs.

“This news is very good for RIVN as the agreement should provide the company with access to capital to not only support ramping up R2 production at its Normal, IL facility, but also to build a channel in Georgia for its mid-car platform,” Bank of America analyst John Murphy wrote in a note shortly after the deal. “We think that RIVN will need to raise a lot of capital, and VW’s investment in RIVN will prove to be important in helping it reach the scale needed to achieve good free cash flow.”

Pras Subramanian is a Yahoo Finance reporter covering the auto industry. You can follow him X and further Instagram.

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