Shares of Workhorse Group Inc slumped 9% on Monday, after the electric truck maker reported quarterly revenue that was about a fifth of what Wall Street expected, prompting the company to slash its annual production target by nearly half.
A global semiconductor chip shortage has caused delays in manufacturing activity, and major automakers including Ford Motor, Honda Motor, General Motors and Volkswagen were forced to hold back production even as car demand picked up during the COVID-19 pandemic.
“Bottlenecks within the global supply chain and offshore shipping delays of commodity raw materials and components as well as our initial stages of production limited our capacity to produce during the first quarter,” Workhorse Chief Executive Officer Duane Hughes said.
Workhorse lowered its 2021 production forecast to 1,000 units, from the 1,800 vehicles it expected earlier. It reported quarterly revenue of $521,000, missing analysts’ estimates of $2.6 million by a wide margin, according to Refinitiv IBES.
Adding to the grim results, the company said it took a loss of $136.6 million primarily due to the reduction in the fair value of its investment in electric pickup truck company Lordstown Motor Corp.
Shares of the Workhorse, which fell as much as 11.3%, had risen about 6% in premarket trading after it announced that it had entered a strategic partnership to make a delivery vehicle with commercial vehicle body solutions provider EAVX, a unit of J.B. Poindexter & Co.
With the deal, the electric truck maker will enter the EV delivery vehicle market, joining a parade of startups such as Arrival, Rivian and Canoo as well as established players including Ford, General Motors and Daimler AG.
“Overall, while the production performance and outlook were disappointing, bright spots like the Poindexter deal could provide an offset,” said Michael Shlisky, an analyst at Colliers Securities.