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JD.com Tops Q3 Earnings Forecast, Falls Short On Revenues

JD.com shares edged higher Monday after the China-based e-commerce group and key rival to Alibaba posted stronger-than-expected third quarter earnings.

JD.Com  (JD)  shares slipped lower Monday after the China-based e-commerce giant and key rival to Alibaba Group Holding Co.  (BABA)  posted stronger-than-expected third quarter earnings but narrowly missed Wall Street revenue forecasts.

JD.com said diluted non-GAAP earnings for the three months ending in September came in at 50 cents per share, well ahead of the consensus forecast of 41 cents per share. Group revenues rose 29.2% from last year to 174.2 billion yuan ($25.7 billion) and were just shy of the the Street consensus forecast of $25.75 billion.

Active customer accounts across its platform jumped 32.1% to 441.6 million over the 12 month period ending in September, JD.com said, while paid subscribers to its JD Plus membership program passed the 20 million mark. Gross merchandise volumes over its Double 11 sales event, the company said, rose 33% from last year amid a record haul for its larger rival Alibaba.

“Today, as China emerges from the pandemic, we are glad to see that our business partners are recovering rapidly with the support of our online and offline supply chain infrastructure. And our consumer mindshare continues to expand with over 100 million new active users joining our platform compared to a year ago,” said CEO Richard Liu. 

“In order to ensure superior customer experience and better serve our business partners, we continued to add new hires even against the backdrop of uncertainties arising from the COVID," he added. "We look forward to continuously leveraging JD’s leading supply chain-based technology and nationwide infrastructure for the benefit of the society.”

JD.com's U.S.-listed shares were marked 4.5% lower in early trading immediately following the earnings release to change hands at $87.80 each, a move that trims the stock' six-month gain to around 61%.

"Despite the weaker seasonality in 3Q20, the strong user growth (32% YoY) in 3Q20 indicates that the user growth momentum is likely to remain strong in the next 1-2 quarters," said Daiwa Capital Markets analyst John Choi. 

"We note that JD grew its GMV by 33% during Double 11, which is faster than 28% in 2019 and 26% in 2018 over the same period," he added. "Given this and its reinvestment strategy, we believe JD’s robust revenue momentum is likely to extend to subsequent quarters."