Back to top's (JD) Q3 Earnings Beat Estimates, Revenues Miss

Read MoreHide Full Article, Inc. (JD - Free Report) reported third-quarter 2018 earnings of 12 cents per share, surpassing the Zacks Consensus Estimate by 4 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 Sep 30, 2018, the company operated 550 warehouses, covering an aggregate gross floor area of approximately 11.9 million square meters in China.'s shares have lost 50.8% on a year-to-date basis compared with its industry’s decline of 3.3%.



Revenues reported revenues of RMB104.8 billion (US$15.26 billion), missing the Zacks Consensus Estimate of US$15.61 billion but increasing 25.1% year over year.

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

In the third quarter, net product revenues increased 22.8% from the prior-year quarter to RMB93.9 billion (US$13.7 billion), accounting for 90% of the total third-quarter sales. The increase was driven by demand for home appliances, food and beverage, cosmetics, home furnishing, as well as baby products.

Net services revenues, accounting for the remaining 10% of its third-quarter sales, also increased 49.4% year over year to RMB10.9 billion (US$1.6 billion). The upsurge was backed by improved brand engagement and better monetization of the company’s platform.

Key Metric

Annual Active Customer Accounts — Annual active customer accounts were 305.2 million in the 12-month period ended Sep 30, 2018, reflecting 14.6% year-over-year growth.

Operating Results

Fulfillment expenses came in at RMB7.8 billion (US$1.1 billion), up 21.8% year over year. Marketing expenses totaled RMB4.1 billion (US$0.6 billion), up 25.2% from the prior-year quarter. Technology and content expenses amounted to RMB3.4 billion (US$0.5 billion), up 96.4% year over year. General and administrative expenses were RMB1.4 billion (US$0.2 billion), up 33% from the year-ago quarter.

Non-GAAP operating margin from continuing operations was 0.6% versus 1.8% in the year-ago quarter.

Non-GAAP EBITDA from continuing operations in the third quarter was RMB1.7 billion versus RMB2.1 billion in the year-ago quarter.

Balance Sheet exited the third quarter with cash, cash equivalents, restricted cash and short-term investments of approximately RMB42.9 billion (US$6.2 billion) compared with RMB52.8 billion (US$8.0 billion) in the second quarter.


For the fourth quarter of 2018, management expects its net revenues in the range of RMB130-RMB135 billion, reflecting growth of 18-23% year over year., Inc. Price, Consensus and EPS Surprise, Inc. Price, Consensus and EPS Surprise |, Inc. Quote

Zacks Rank and Stocks to Consider

Currently, has a Zacks Rank #3 (Hold). Some better-ranked stocks in the broader technology sector include boohoo group plc (BHOOY - Free Report) , QuinStreet, Inc. (QNST - Free Report) and AMETEK, Inc. (AME - 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 rate for boohoo group, QuinStreet and AMETEK is currently pegged at 25%, 25% and 11.18%, respectively.

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