Carbon Revolution (ASX:CBR) share price sinks 7% on quarterly revenue drop

Carbon fibre wheels can significantly reduce the weight of cars and up their performance.

| More on:
A woman stops on a road to check the tyre or wheel on her car

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The Carbon Revolution Ltd (ASX: CBR) share price is sliding in morning trade, down 7.21% to $1.03 per share.

Below, we look at the carbon fibre wheel manufacturer's business update for the quarter ending 30 September (Q1 FY22).

What did Carbon Revolution report for Q1?

The Carbon Revolution share price is sliding today after the company reported a 28% quarter-on-quarter decrease in revenue. Q1 FY22 revenue came in at $6.2 million.

Revenue from Carbon Revolution's wheel sales was $5.9 million with $300,000 of revenue from engineering services and tooling.

The company said revenue was in line with its expectation for the full 2022 financial year, adding that "the planned inventory build-ahead is currently on track to support the expected second half weighting of FY22 sales".

According to the update, the 35% drop in the number of wheels sold in the past quarter (2,100) was largely due to semi-conductor chip shortages that have been hampering the global automotive industry. This saw the "GT500 wheel sales for model year 21 conclude earlier in Q1 FY22 than would otherwise have normally been expected".

Carbon Revolution said its customer orders and "their forecast profile", including Ferrari, indicated a lift in annual sales in the second half of the financial year.

The company has a cash balance of $63.9 million as at 30 September, saying the net cash outflow of $23.4 million in Q1 was in-line with its expectations.

Looking ahead, Carbon Revolution said with ongoing uncertainty about COVID-19's impact on the global car industry and semi-conductor chip shortages it would not provide sales guidance for FY22.

Looking at potential growth it added:

In contrast with this time last year, customers are now focusing on future product planning and the global move towards electric vehicles is an added factor driving this increasing engagement.

Carbon Revolution share price snapshot

The Carbon Revolution share price has been struggling in 2021, down 61%. By comparison the All Ordinaries Index (ASX: XAO) is up 11% year-to-date.

Over the past month Carbon Revolution shares are down 9%.

The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of and has recommended Carbon Revolution Limited. The Motley Fool Australia has recommended Carbon Revolution Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Industrials Shares

A man in his 30s holds his laptop and operates it with his other hand as he has a look of pleasant surprise on his face as though he is learning something new or finding hidden value in something on the screen.
Broker Notes

How this undervalued ASX All Ords share could rocket 80% in a year

A leading fund manager expects a big turnaround for this beaten-down ASX All Ords stock.

Read more »

A woman sits at her computer with her chin resting on her hand as she contemplates her next potential investment.
Industrials Shares

Key takeaways from ALS shares results according to Macquarie

ALS announced an underlying net profit after tax (NPAT) of $312 million this week.

Read more »

A woman sits crossed legged on seats at an airport holding her ticket and smiling.
Industrials Shares

What does Macquarie think Auckland International Airport shares are worth?

Is it time to invest in this unique holding?

Read more »

A male investor wearing a blue shirt looks off to the side with a miffed look on his face as the share price declines.
Industrials Shares

Guess which ASX 200 share is down 8% on earnings miss

Why are investors selling this stock? Let's dig deeper into things.

Read more »

Two male ASX 200 analysts stand in an office looking at various computer screens showing share prices.
Broker Notes

Macquarie tips 20% upside for this ASX 200 industrials stock

Let's see what the broker is saying about this stock following an update.

Read more »

a woman holds her hands to her temples as she sits in front of a computer screen with a concerned look on her face.
Industrials Shares

Guess which ASX 200 stock is crashing 24% on results day

Investors were not impressed with this result. But why?

Read more »

A man looking at his laptop and thinking.
Industrials Shares

Which ASX 200 industrials stock does Macquarie expect to sink 40% over the next 12 months?

Can this name build it's way out of such negative sentiment?

Read more »

Shocked office worker staring at computer screen with colleagues working in the background.
Industrials Shares

ASX 300 stock falls on shock founder CEO exit

A change of leadership has been announced.

Read more »