JD.com shares tank after missing on revenue as China's economic growth slows
- JD.com beat profit estimates, but missed on sales.
- Its quarterly revenue growth was the slowest since it went public in 2014, in the wake of China's slowing economic growth.
- Shares are sliding following the announcement.
- Watch JD.com trade live here.
Shares of JD.com plunged as much as 4% before Monday's opening bell after the company posted worse-than-expected revenue for the third quarter in the wake of China's slowing economic growth.
JD.com, China's second largest e-commerce site after Alibaba, reported adjusted earnings per share of 0.80 yuan ($0.12), down from last year's 1.52 yuan. Analysts surveyed by Bloomberg were expecting 0.77 yuan.
Its top line came at 104.8 billion yuan ($15.3 billion), up 25.1% year-over-year, but also the slowest quarterly revenue growth since it went public in 2014. Quarterly revenue missed the 105.7 billion yuan target that was expected by analysts.
"We are pleased to report solid results for the third quarter, with our core JD Mall business driving consistent growth under its highly experienced management team," said CEO Richard Liu in a press release.
"JD's commitment to convenient, reliable service and high-quality, authentic products continues to translate into an increasingly loyal user base. Our 'Retail as a Service' strategy is also gaining traction as we provide a wide range of partners with innovative retail infrastructure solutions."
Looking ahead, the company expects its revenue growth to slow down further, and now sees its fourth-quarter sales in the range of 130 billion yuan to 135 billion yuan, or up 18% to 35% year-over-year. Analysts were expecting 134.3 billion yuan.
JD.com's disappointing revenue growth came as the world's second-largest economy cools down amid deleveraging and ongoing trade tensions with the US. In the third quarter, China's economy grew at a 6.5% year-over-year rate, the weakest since the financial crisis. And Chinese largest e-commerce site Alibaba earlier this month also missed on sales and slashed full-year revenue guidance, citing an uncertain economy.
And it was the first time the company reported quarterly earnings since CEO Richard Liu was briefly detained in Minneapolis, Minnesota, over a rape allegation in August. Liu has been absent from several high-profile events in China since then.
JD.com was down 48% this year through Friday.
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