JD.com Inc. shares declined in extended trading after the Chinese e-commerce giant reported quarterly earnings that topped analyst estimates, though its outlook fell short of expectations.
The Beijing-based company posted a net profit of $1.2 billion for the three months ended March 31, up 18% year-over-year and exceeding the $1.1 billion consensus forecast compiled by Refinitiv. Revenue rose 7% to $36.8 billion, also surpassing the $35.9 billion estimate.
Despite the beat, JD.com’s guidance for the current quarter disappointed investors. The company forecast revenue growth of 5-7% in the second quarter, below the 8% average estimate from analysts. Operating margins were cited as a key concern, with management warning of higher logistics and technology costs pressuring profitability.
JD.com’s logistics unit, JD Logistics, reported a narrower-than-expected loss of $120 million, but its performance lagged behind peers amid rising fuel and labor expenses. The unit’s revenue grew 12% to $3.1 billion, yet its operating margin contracted to -3.8% from -2.1% a year earlier.
Shares of JD.com fell 4% in after-hours trading following the results, extending losses from the regular session where they closed down 1.8% at $28.50. The stock has underperformed the broader Chinese tech sector this year, down 12% year-to-date compared with a 5% decline in the CSI 300 Tech Index.
Analysts at Citi maintained a neutral rating on the stock, citing margin pressures and macroeconomic headwinds in China. "While the earnings beat is positive, the guidance suggests a tougher operating environment ahead," Citi analyst Alicia Yap said in a note.
The company’s cash position remains strong at $14.3 billion, providing a buffer against near-term volatility. However, investors remain focused on JD.com’s ability to balance growth investments with margin recovery amid regulatory scrutiny and competitive pressures in China’s e-commerce market.
