After the electric truck manufacturer reported quarterly revenue, shares of Workhorse Group slumped 9% on Monday, and it was about a fifth of what Wall Street thought. This indicated to the company to minimise the production by nearly half.
A global semiconductor chip shortage has caused delays in production activity. Significant automakers, including Honda Motor, General Motors, Volkswagen, and Ford Motor, were forced to hold back manufacturing even as car demand picked up through the COVID-19 pandemic.
"Bottlenecks within the worldwide supply chain and foreign shipping delays of stock raw materials and parts as well as our primary stages of manufacturing limited our ability to produce throughout the first quarter," Workhorse Chief Executive Officer (Duane Hughes) said.
Workhorse reduced its making forecast to 1,000 units of 2021, from the 1,800 vehicles it assumed earlier. It recorded quarterly revenue of $521,000, missing analysts' guesses of $2.6 million by a broad margin, according to Refinitiv IBES.
Adding to the implacable results, the company said it suffered a loss of $136.6 million initially due to the decrease in the fair value of its investment in electric trucks company Lordstown Motor Corp.
Shares of the Workhorse, which dropped as much as 11.3%, had increased about 6% in premarket trading after it declared that it had started a solid partnership to produce a delivery vehicle with commercial vehicle body solutions provider EAVX, a unit of J.B. Poindexter & Co.
With the deal, the electric truck producer will enter the EV delivery vehicle market, joining a parade of startups such as Rivian, Canoo and Arrival, and practised players including General Motors, Ford and Daimler AG.
"Overall, while the making performance and outlook were unexpected, bright spots like the Poindexter contract could provide an offset," said Michael Shlisky (an analyst at Colliers Securities).
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