JD Reports Wider-than-Expected Loss in Q3, In-Line Revenues

JD.comJD reported a loss of 6 cents in the third quarter, wider than the Zacks Consensus Estimate of a loss of 5 cents.

GMV

According to the press release, GMV for the third quarter was RMB115.0 billion (US$218.1 billion), a 71% surge from the year-ago quarter.

Core GMV, i.e., GMV excluding Paipai.com , jumped 76% year-over-year to RMB111.0 billion (US$17.5 billion). This was mainly backed by increase in active customer accounts and the number of fulfilled orders.

While Core GMV from online direct sales came in at RMB61.3 billion, a 52% jump year over year, core revenues from online marketplace businesses totaled RMB49.7 billion, soaring 121%.

Core GMV from electronics and home appliance products increased 59% from the year-ago quarter to RMB56.8 billion, while Core GMV from general merchandise and others climbed a massive 98% to RMB54.2 billion.

Revenues

JD.com reported revenues of RMB44.1 billion (US$6.9 billion), representing a 52% increase from the year-ago figure. This was mainly attributed to growth in active user accounts and the number of fulfilled orders. Revenues matched the Zacks Consensus Estimate.

While net revenue from online direct sales increased 48%, net revenue from services and others soared 111% from the year-ago quarter. This increase was primarily attributed to the increased revenues from JD's rapidly expanding online marketplace, advertising services and third-party logistics services.

Margins

According to the press release, net loss attributable to ordinary shareholders was RMB530.8 million (US$83.5 million) and net margin was negative 1.2%.

Per the press release, non-GAAP net income attributable to ordinary shareholders was RMB27.0 million (US$4.3 million), while non-GAAP net margin was 0.1%.

Non-GAAP gross margin improved to 13.4%, up from 12.2% a year ago.

JD's total operating expenses (Fulfillment + Marketing + Technology and Content + General and Administrative) came in at RMB5.44 billion. Specifically, Fulfillment expenses increased 63% to RMB 3.5 billion (US$0.5 billion) from the year-ago-quarter while the Marketing expenses increased 89% to RMB1.7 billion (US$0.3 billion). Technology and content expenses increased 73% to RMB884.7 million (US$139.2 million) from the third quarter of 2014, while General and Administrative expense increased 72% to RMB755.1 million (US$118.8 million).

Earnings per Share

According to the press release, net loss per ADS for the third quarter of 2015 was RMB0.39 (US$0.06), compared with RMB0.12 a year ago.

Non-GAAP net income per ADS was RMB0.02 (US$0.003) compared with RMB0.27 in third-quarter 2014.

Balance Sheet

As of Sep 30, 2015, JD's cash and cash equivalents, restricted cash and short-term investments totaled RMB23.4 billion (US$3.7 billion). Net inventories were RMB17.0 billion (US$2.7 billion), while inventory turnover days were 41.1 days in the third quarter of 2015 as against 38.7 days last year.

From early 2014, JD.com started offering consumer financing. As of Sep 30, 2015, the balance of current portion of financing provided to customers that affected accounts receivable balances came in at RMB4.8 billion (US$0.8 billion).

Guidance

Management expects fourth-quarter net revenue growth between 47% and 51% on a year-over-year basis.

For non-GAAP bottom line, excluding stock-based compensation, JD maintained the previous guidance range of break-even to negative 0.5% for the full-year 2015.

JD currently has a Zacks Rank #3 (Hold). Investors can also consider Stamps.com Inc. STMP , Travelport Worldwide Ltd. TVPT and Amazon.com Inc. AMZN . While Stamps.com and Travelport sport a Zacks Rank #1 (Strong Buy), Amazon carries a Zacks Rank #2 (Buy).

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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