Motley Fool
0
All posts from Motley Fool
Motley Fool in Motley Fool,

JD.com, Inc. Turns a Profit on 38% Higher Sales

JD.com (NASDAQ: JD), which runs a large e-commerce business in China, reported third-quarter results early Monday morning. The company turned a small profit as top-line sales expanded nearly 40% over the year-ago period, and the company is working up a data-driven marketing platform with the help of many well-known partners.

Let's dive into JD's latest business update.

JD.com's third-quarter results: The raw numbers

Metric

Q3 2017

Q3 2016

Year-Over-Year Change

Net revenue

$12.6 billion

$9.1 billion

38%

Net income

$147 million

($121 million)

N/A

GAAP earnings from continuing operations per ADS (diluted)

$0.05

($0.16)

N/A

Data source: JD.com.

What happened with JD.com this quarter?

  • JD's third-quarter sales landed in the upper half of management's revenue guidance for the quarter. The modest bottom-line profit was only the second positive reading on that line since JD started reporting results as a public company.
  • During the quarter, JD launched new partnerships with some of the largest e-commerce and social media brands in China in order to expand the company's marketing platform and tap into the established user bases of these new partners. Spearheading that effort, JD expanded a long-standing collaboration with social media giant Tencent (NASDAQOTH: TCEHY), launching a shopping platform known as the JD-Tencent Retail Marketing Solution.
  • By the end of the third quarter, JD.com had 160,000 merchants participating in its online marketplace, up from 110,000 a year earlier.

For the fourth quarter, JD's management expects top-line revenue to rise approximately 37% year over year to land near $17.1 billion.

Image source: JD.com.

What management had to say

In a prepared statement, JD CEO Richard Liu underscored the wide-ranging nature of his company's product selection.

"We are achieving our mission of bringing China's consumers the widest selection of top brands and, by far, the highest quality e-commerce experience," Liu said. "We are also building robust product content and enhancing user engagement, as our innovative tools enable brands to execute highly targeted online marketing programs."

Looking ahead

Besides opening up new marketing and consumer research avenues, JD has also been busy securing distribution deals with global luxury brands such as Bang & Olufsen, Armani, and Dyson. The company's list of strategic partners is starting to read like a who's who of the American consumer sector, which plays well with JD's stated vision to revolutionize the retail industry in China. Management recently committed to distributing at least $2 billion of U.S. goods over the next three years -- $1.2 billion of that agreement covered guaranteed orders of American pork and beef products, showcasing JD's logistics pipeline for shipping frozen and chilled food products across international borders.

The company has not yet stated any desire to expand its retail operations outside China and Southeast Asia, but this could be a small first step in that direction.

10 stocks we like even better than JD.com
When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*

David and Tom just revealed what they believe are the 10 best stocks for investors to buy right now... and JD.com wasn't one of them! That's right -- they think these 10 stocks are even better buys.

Click here to learn about these picks!

*Stock Advisor returns as of November 6, 2017

Anders Bylund has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends JD.com. The Motley Fool has a disclosure policy.