How Did JD.com's Q2 Compare To Expectations?

Shares of JD.Com Inc(ADR) JD fell more than 5 percent Monday after the China-based e-commerce firm reported a loss in its second quarter earnings report.

JD.com, China's second-biggest e-commerce firm, reported revenue of Rmb93.2 billion ($13.98 billion) in the quarter, which marks a 44 percent year-over-year increase, UBS analyst Ming Xu commented in a brief report. The Hong Kong-based analyst added that this represents a 4-6 percent beat compared to what analysts were expecting, but non-GAAP operating margin of 0.6 percent fell short of the 0.9 percent Xu was expecting due to a lower marketplace contribution and anniversary promotions.

Gross merchandise value (GMV) in the quarter rose 46 percent year-over-year to Rmb234.8 billion and exceeded Xu's estimate of Rmb224.5 billion. The quarter also marked an acceleration in growth from 42 percent year-over-year in the first quarter.

Looking forward, JD's third quarter revenue guidance of Rmb81.8 to 84.2 billion marks a year-over-year growth of 36 to 40 percent, which does signal a slowdown from the second quarter but is largely in-line with the analyst's estimate of Rmb83.2 billion and the consensus estimate of Rmb82.5 billion.

Bottom line, a top-line beat and signs of year-over-year re-acceleration are a "slight positive" but the weaker margins are a key focus and concern for investors.

Xu maintains a Neutral rating on JD's stock with an unchanged $41 price target.

Related Links:

Who Needs All This Political Worry? This Pro Says Invest Outside The US

China's Forgotten E-Commerce Giant Is Looking To Make Its Mark