Back to top

Image: Bigstock

JD.com (JD) Misses Earnings and Revenue Estimates in Q2

Read MoreHide Full Article

JD.com, Inc. (JD - Free Report) reported second-quarter 2018 earnings of 5 cents per share, missing the Zacks Consensus Estimate by 7 cents.

The company continued to invest in order to expand its fulfillment capability and broaden product offerings for enhancing services offered to sellers on its marketplace platform to ensure long-term growth. As of Jun 30, 2018, the company operated 521 warehouses covering an aggregate gross floor area of approximately 11.6 million square meters in China.

The company's shares have lost 21.9% in a year’s time against its industry’s rally of 42%.

 

Revenues

JD.com reported revenues of RMB122.3 billion (US$18.5 billion), missing the Zacks Consensus Estimate of US$19.21 billion but increasing 31.2% year over year.

The year-over-year increase was driven by strong revenues from both product as well as services.

In the second quarter, net product revenues increased 29.4% from the prior-year quarter to RMB110.5 billion (US$16.7 billion), accounting for 91% of the total second-quarter sales. The increase was driven by demand for home appliances, food and beverage, cosmetics, home furnishing and baby products.

On the other hand, net services revenues increased 51% year over year to RMB11.8 billion (US$1.8 billion). The upsurge was enhanced by improved brand engagement and better monetization of the company’s platform. It accounted for the remaining 9% of its second-quarter sales.

Key Metric

Annual Active Customer Accounts — Annual active customer accounts were 313.8 million in the 12-month period ended Jun 30, 2018, reflecting 21.5% year-over-year growth.

Operating Results

Non-GAAP gross margin in the second quarter was 13.3% versus 13.4% in the year-ago quarter.

Fulfillment expenses increased to RMB8.2 billion (US$1.2 billion), up 28.7% year over year. Marketing expenses rose to RMB5.3 billion (US$0.8 billion), up 29.1% from the prior-year quarter. Technology and content expenses increased to RMB2.8 billion (US$0.42 billion), up 79.8% year over year. General and administrative expenses rose to RMB1.3 billion (US$0.2 billion), up 23.1% from the year-ago quarter.

Non-GAAP operating margin from continuing operations was 1.1% versus 0.8% in the year-ago quarter.

Non-GAAP EBITDA from continuing operations in the second quarter was RMB9.2 billion (US$139.4 million) versus RMB1.1 billion in the year-ago quarter.

Balance Sheet

JD.com exited the second quarter with cash, cash equivalents, restricted cash and short-term investments of approximately RMB52.8 billion (US$8.0 billion) compared with RMB37.9 billion (US$6 billion) in the last reported quarter.

Guidance

For the second quarter of 2018, management expects net revenues in the range of RMB104.5-RMB109 billion, reflecting growth of 29-33% year over year.

JD.com, Inc. Price, Consensus and EPS Surprise

 

JD.com, Inc. Price, Consensus and EPS Surprise | JD.com, Inc. Quote

Zacks Rank and Stocks to Consider

Currently, JD.com has a Zacks Rank #5 (Strong Sell). Some better-ranked stocks in the technology sector are Expedia Group, Inc. (EXPE - Free Report) , Infineon Technologies AG (IFNNY - Free Report) and Rambus Inc. (RMBS - Free Report) , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Long-term earnings growth for Expedia, Infineon Technologies and Rambus is currently projected to be 16.1%, 7.5% and 10%, respectively.

Looking for Stocks with Skyrocketing Upside?

Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.     

Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.  

See the pot trades we're targeting>>    

Published in