JD.com Sees Q4 Better Than Analysts Forecast

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JD.com Inc. (NASDAQ: JD) reported third-quarter fiscal 2015 results before markets opened Monday. The Beijing-based online direct retailer reported an adjusted diluted loss per American depositary share (ADS) of $0.06 on revenues of $6.9 billion. Third-quarter results compare to the consensus estimates for earnings per ADS of $0.09 on revenues of approximately $6.95 billion. One ADS equals two Class A ordinary shares.

Gross merchandise value (GMV), the total value of sales transacted on the company’s websites, rose to $17.5 billion, and annual active customer accounts increased by 59% to 131.9 million in the 12-month period to September 30. The increases in GMV and net revenues were primarily due to the growth in active customer accounts and the number of fulfilled orders in the third quarter of 2015, according to the company.

Costs of revenues rose 49% to $6 billion year over year, primarily due to growth in the direct sales business and increased traffic acquisition costs. Fulfillment expenses, which include procurement, warehousing, delivery and customer service, rose 63% to $500 million.

Net revenues for the fourth quarter of 2015 are expected to be between RMB51.0 billion (about $8 billion) and RMB52.5 billion (about $8.23 billion), representing a growth rate between 47% and 51% compared with the fourth quarter of 2014. This forecast reflects JD.com’s current and preliminary expectation, which is subject to change.

The consensus analysts’ forecast calls for earning per ADS of $0.03 on revenues of RMB50.61 billion.

The company is shutting down its consumer-to-consumer website, Papai, in order to “combat the marketing and sale of counterfeit products.”

JD.com’s ADSs closed down about 7% on Friday at $26.75 and have traded up flat in Monday’s premarket session. The stock’s 52-week range is $21.55 to $38.00. The consensus price target is $37.74 per ADS and the high target is $47.17.

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