Fisker Stock Is Dropping After Earnings. Here’s What Really Matters.

The Fisker Ocean electric sport-utility vehicle is shown at CES 2020 in Las Vegas in early 2020.


Bridget Bennett/Bloomberg

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Fisker

stock is falling after reporting disappointing third-quarter results, but those numbers don’t really matter. The company doesn’t have sales yet, so investors should pay attention to milestones, and Fisker hit a big one recently.

Fisker (ticker: FSR) stock was down 3.2% in premarket trading Thursday, while


Dow Jones Industrial Average

futures were flat and


S&P 500

futures had added about 0.1%.

Fisker reported a loss of 37 cents per share, with no sales, on Wednesday evening, while analysts were looking for a 34-cent loss. Earnings don’t tell us much, however. Fisker is still developing its all electric-SUV, the Ocean. Production is expected to start in November 2022; reservations hit 18,600 as of Tuesday, up from about 17,500 in early August.

“The critical sourcing phase for Fisker Ocean is now largely complete,” said CEO Henrik Fisker in the company’s news release. Just before earnings, his company announced a battery-supply deal with China’s Contemporary Amperex Technology Co. Ltd (300750.China), which is better known as CATL and is the world’s largest EV battery maker. The deal is for 5 gigawatt-hours of annual battery capacity, which is enough for roughly 50,000 EVs a year.

Fisker will use a cheaper lithium iron phosphate cathode battery for shorter-range vehicles and a lithium manganese cobalt cathode battery for its longer-range vehicles. Using different cathode chemistries is a common strategy for EV makers looking to balance range, cost, and the availability of materials.

Fisker finished the quarter with about $1.4 billion in cash, up from about $962 million at the end of the second quarter. The company raised about $570 million in a convertible bond offering. Fisker burned through roughly $115 million in cash during the quarter.

Fisker stock has been volatile in 2021 as investors wait for production to start. Coming into Thursday, shares were up about 22% over the past three months. but the stock is down 43% from its March 52-week high of almost $32.

Write to Al Root at allen.root@dowjones.com

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