Beat of The WEEK: Mobileye Declines on Weak Outlook, Narrows Earnings Surprise

Mobileye (MBLY) stock took a sharp tumble this week after the autonomous vehicle maker slashed its full-year guidance despite reporting higher-than-expected revenue and earnings per share, citing weakness in China's electric vehicle (EV) market. I.

The company reported an unadjusted net loss of $79 million, or 10 cents per share, on revenue of $458 million in the first quarter. Both crossed out the details. On an adjusted, or non-gap basis, the company posted a profit of $115 million, or 14 cents per share.

Mobileye lowered the midpoint for its revenue guidance by 6.5%, with work losses now expected to be as high as 34%. The company now expects revenue of $2.06 billion to $2.11 billion this year, with a loss of $166 million and $195 million.

Mobileye, Quarterly Revenue

Revenues prior to Q3 2022 are obtained from Intel quarterly earnings reports, when Mobileye was a subsidiary of Intel.

Demand in the world's biggest auto market prompted the company, which makes cameras, cameras, sensors and software for autonomous and electric vehicles, to lower its full-year guidance. The demand outlook in China has darkened recently after Tesla (GSLA) launched a price war amid domestic divergence following aggressive cost selections for its EVs. At the same time, the Chinese government withdrew incentives for AV cladding.

"China's electric vehicle market has been negatively impacted by meaningful pricing actions by global EV OEMs, reduction in government electric vehicle subsidies and general economic weakness in the country," the company said in its earnings statement.

Mobileye was a subsidiary of Intel (INTC) until last October, when it went public on Nasdaq in an $861 million initial public offering (IPO).

Intel, which bought the company in late 2017, is still the majority shareholder.

Shares of Mobileye closed down 16% on Thursday after plunging as much as 31% in early trading. Shares recovered slightly in trading Friday, closing up about 1.9%. Despite this week's losses, the company's shares are up nearly 7.4% during the period, compared with a nearly 22% gain in the broader S&P 500 information technology sector.