Nio reported third-quarter results that were results largely as previewed and gave a better-than-feared outlook for the fourth quarter, said Edison Yu's team.

Nio (NYSE: NIO) reported third-quarter earnings today, and Deutsche Bank analyst Edison Yu's team shared their first impressions afterward.

Here's what they had to say in their research note.

Nio reported 3Q results largely as previewed and gave a better than feared 4Q outlook. Deliveries for the third quarter were already reported at 55,432 units, leading to revenue of 19.1bn RMB, in line with our forecast (consensus 19.4bn).

Gross margin of 8.0% was above our 7.4% forecast (consensus 8.2%), driven by vehicle margin (11.0% vs. our 10.1%). Opex of 6.6bn was above our expectations of 6.3bn, mainly on notably higher SG&A, offset partially by lower R&D.

All together, adjusted EPS of (2.28) came in consistent with our model. Operating cash flow was positive, driven by strong WC dynamics especially A/P.

Management provided a slightly better than feared outlook for 4Q23, calling for 47,000-49,000 deliveries (16.1-16.7bn RMB in revenue). This compares to our 46,750 unit forecast and suggests December will be flattish relative to Nov's 15,959.

Separately, Nio confirmed it is acquiring the JAC plant assets for its two plants for 3.16bn RMB (excluding tax), a bit higher than we would have expected.

On the earnings call, we will look for further insight on the trajectory of volume/ margin going forward (4Q vehicle margin and 2024 cadence of deliveries) and benefit from cost actions + partnerships on battery-swapping.

Nio Q3 earnings: Revenue hits record high, gross margin rebounds to 8%, loss narrows