JD.com Stock: Gains in Pre-Market as Revenue Beats but Income Plunges
JD.com entered the third quarter with solid top-line momentum, but the company’s rising costs and weakening margins overshadowed its revenue gains, leading to a steep decline in profitability.
- JD.com delivered strong Q3 revenue but suffered a major collapse in profit.
- Operating income swung from a profit to a loss as expenses surged.
- Adjusted earnings and EBITDA fell sharply year-over-year.
- Revenue beat expectations, helping shares rise pre-market.
- Analysts remain divided on whether JD can restore margins soon.
While demand across the platform lifted quarterly sales close to RMB 300 billion (around $42 billion), the surge was not enough to prevent a dramatic contraction in earnings.
Revenue Climbs, but Earnings Fall Off a Cliff
The company reported RMB 299.06 billion in net revenue for the quarter, up nearly 15 percent from a year earlier and slightly above what Wall Street expected. However, income attributable to shareholders fell sharply to RMB 5.28 billion, less than half of last year’s figure. Earnings per share followed the same trajectory, dropping to RMB 1.69 from RMB 3.86.
On an adjusted basis, the picture was no brighter. Core net income slid to RMB 5.80 billion, down from RMB 13.17 billion a year ago, while adjusted earnings per ADS dropped to RMB 3.73, compared with RMB 8.68 in the same period last year. Fifteen analysts surveyed had anticipated adjusted earnings of RMB 2.89 per share, but JD.com delivered well below that mark.
Operating Performance Weakens Dramatically
JD’s operating picture showed even greater stress. The company swung from RMB 12.04 billion in operating income last year to a quarterly operating loss of RMB 1.05 billion. Adjusted operating income nearly evaporated, falling to just RMB 211 million from RMB 13.08 billion a year earlier.
The squeeze was also reflected in adjusted EBITDA, which collapsed to RMB 2.47 billion from RMB 15.08 billion. Management attributed the downturn to elevated expenses across logistics, technology services, and expansion initiatives.
Investor Reaction: Surprisingly Poszitive
Despite the disappointing earnings, the stock reacted with unexpected strength in pre-market trade. JD.com shares rose more than 4 percent to $32.55 on Nasdaq, as traders viewed the revenue beat and improving demand trends as signs that growth may stabilize in coming quarters.
Analysts Still Split on JD’s Long-Term Path
While JD managed to exceed revenue expectations from 28 analysts surveyed, the depth of the earnings drop has renewed debate around the company’s ability to sustain profitability while scaling its supply-chain-driven business model. Some analysts argue that JD is prioritizing long-term infrastructure and service expansion at the expense of short-term margins, while others see the quarter as a warning sign that cost pressures may not ease anytime soon.
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Alexander Zdravkov is a person who always looks for the logic behind things. He has more than 3 years of experience in the crypto space, where he skillfully identifies new trends in the world of digital currencies. Whether providing in-depth analysis or daily reports on all topics, his deep understanding and enthusiasm for what he does make him a valuable member of the team.
