Nov 7 (Reuters) - Rivian stuck to its forecast of achieving gross profit in the fourth quarter even as it reported its first drop in quarterly revenue hurt in part by shortage of a component.
Shares of Rivian rose 4.2% as the Irvine, California-based company expects to "generate modest positive gross margin" in the current quarter helped largely by cost cuts, and higher revenue per unit sold.
"(The company's) reaffirmed forecast for Q4 profitability is a positive signal, indicating effective cost management and operational streamlining," said Rivian investor Vitaly Golomb.
Meanwhile, EV rival Lucid beat market expectations for quarterly revenue, owing to robust demand for its luxury electric sedans, as it prepares to enter the SUV market with its Gravity model.
Lucid's loss per vehicle sold narrows
Due to the shortage of a part used in the drive unit, Rivian last month slashed its full-year production forecast to between 47,000 and 49,000 vehicles, from its earlier projection of 57,000 units.
This would mean a decline in annual production from last year for the Amazon.com-backed company. However it expects deliveries to grow to between 50,500 and 52,000 vehicles in 2024, from 50,122 units last year.
"We weren't able to build all the products and the mix of products that we planned and so that affected us on the demand side and on the revenue side," CEO RJ Scaringe told Reuters in an interview.
Revenue in the third quarter slumped 34.6% to $874 million, missing analysts' average estimate of $989.6 million, according to data compiled by LSEG.
Rivian's loss per vehicle sold widens
EV startups like Rivian and Saudi PIF-backed rival Lucid have been burning cash as they grapple with ballooning costs to ramp up production to take on market leader Tesla.
Rivian also announced a multi-year supply deal for batteries with LG Energy Solution's Arizona subsidiary for its R2 midsized SUV.
The agreement will help the EV maker stick to the domestic manufacturing requirements as part of the Biden Administration's Inflation Reduction Act, which provides incentives for EV buyers.
"We're closely analyzing a variety of outcomes that could play out with the change in administration," Scaringe told Reuters regarding Donald Trump's election victory and potential alterations of policies around EVs.
