JD.com Beats Revenue Guidance, Still at Slowest Pace of Growth
The stock of JD.com Inc. (Nasdaq: JD) was trading 2 percent higher intraday Friday after the company, China's second-largest e-commerce provider, reported better-than-expected revenue growth for the first quarter.
The giant, which also operates a grocery chain and develops innovative technology, among other things, reported revenue increase of 21 percent for the first three months of 2019, at $18 billion. The results beat analysts' forecasts, but still marked the company's slowest pace on record.
Net income attributable to ordinary shareholders nearly quadrupled from a year ago to $1.1 billion in the first quarter, or 74 cents per American depositary share, according to the report.
In response to the announcement, the stock of JD rose 74 cents in the afternoon to $28.25 per ADS in New York.
JD's chief financial officer, Sidney Huang, said in the statement today, "The first quarter saw solid top line growth with record breaking profitability, further demonstrating the superiority of JD.com's business model as compared to traditional retail formats."
JD differentiates itself from rivals in China by operating an in-house logistics team and warehousing unit and carrying its own inventory.
The company is undergoing a period of restructuring, with several high-level staff leaving the company in recent months. The company has launched layoffs at all levels at the company, and that morale was low.
In an earnings call on Friday, executives said the staff cuts had been "overinterpreted" and denied that there had been "massive layoffs"
Meanwhile, a University of Minnesota student recently filed a civil lawsuit against JD's chief executive officer, Richard Liu, alleging he raped her. Liu, through his lawyers, has maintained his innocence.
JD.com also said on Friday it would renew its strategic partnership with social media giant Tencent Holdings Ltd. (HKEX: 0700) for three more years, starting in late May. Under the agreement, China's leading social network, WeChat, operated by Tencent, embeds a link to JD's e-commerce site.
It also said it has secured financing for its healthcare subsidiary, JD Health, with investors including CICC Capital and CPEChina Fund. Post financing, the unit is now valued at $7 billion.
Looking forward, JD said it expects to generate revenue of between 145 billion yuan and 150 billion yuan in the second quarter, representing an increase of between 19 and 23 percent year-over-year.
(Reuters contributed to this article)