JD.com stock jumps after big profit beat, 'encouraging' outlook and as CEO Lei Xu to retire for 'personal reasons'

The U.S.-listed shares of JD.com Inc. (JD) jumped 2.3% in premarket trading Thursday, after the China-based e-commerce giant reported a big first-quarter profit beat, said it was seeing more encouraging trends in the current quarter and said Chief Executive Officer Lei Xu will retire. The company swung to net income of RMB6.26 bln ($912 million), or RMB3.93 per American depositary share (ADS), from a loss of RMB2.99 billion, or RMB1.92 per ADS, in the year-ago period. Excluding nonrecurring items, adjusted earnings per ADS of RMB4.76 were well above the FactSet consensus of RMB3.53. Revenue grew 1.4% to RMB242.96 billion ($35.38 billion), above the FactSet consensus of RMB240.81 billion, as product revenue fell 4.3% to RMB195.56 billion but service revenue surged 34.5% to RMB47.39 billion. "During the first quarter, we were pleased to see service revenues grow to account for 20% of our total revenues, helping deliver strong margins and reflecting our success in attracting a record number of third-party merchants to the JD.com platform," said Chief Financial Officer Sandy Xu. "We also see more encouraging trends in Q2, both financially and operationally, as we push forward our proactive adjustment." Separately, the company named Sandy Xu as its next CEO as Lei Xu retires, due to "personal reasons." The stock had recovered slightly since closing at a 3 1/2-year low of $33.70 on April 25. It was still down 37.5% year to date, while the iShares MSCI China exchange-traded fund (MCHI) has lost 1.0% and the S&P 500 has gained 7.8%.

-Tomi Kilgore

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05-11-23 0703ET

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