JD.com Inc. (NASDAQ: JD) is slated to report fourth quarter 2019 earnings results on Monday, March 2, before the opening bell. The consensus estimates are for earnings of $0.06 per share on revenue of $23.7 billion.
The quarterly results are expected to benefit from strength in
the retail business and the company’s expansion into lower-tier cities through
its social e-commerce platform Jingxi. Last quarter, 75% of Jingxi’s new users were
from lower-tier cities.
The company has seen strong growth in revenue, aided by growth in users, over the past quarters and this momentum is expected to continue in the fourth quarter as well. JD.com has been taking efforts to improve its customer experience and this is likely to have brought more users to its platform.
Also read: JD.com Q3 2019 Earnings Conference Call Transcript
The company’s efficient logistics and delivery services are
also likely to have fueled the results during the quarter. However, higher
costs related to investments are likely to pressure the bottom line. Lower
margins are another cause of concern.
Last month, reports emerged about JD.com planning to spin
off its logistics arm through an IPO in the second half of the year that would value
the company at around $30 billion. It is expected that as a stand-alone entity,
JD Logistics would perform better. Separating the capital-intensive business
unit might improve the company’s overall cash position and enhance shareholder
value. Updates on this area will be worth watching.
In the third quarter of 2019, JD.com beat revenue and earnings estimates. Net revenues increased 28.7% to RMB134.8 billion, or $18.9 billion. Adjusted net income per ADS was RMB2.08 ($0.29).
For the fourth
quarter of 2019, net revenues are expected to grow 21-25% to a range
between RMB163 billion and RMB168 billion compared to the prior-year
period.
Shares of JD.com have gained 17% in the past three months. The stock has a strong Buy rating and an average price target of $47.08.