JD stock surged in Wednesday trading, after Chinese e-commerce giant JD.com posted fourth-quarter earnings and sales ahead of expectations. The Beijing-based company also announced plans to buy back an additional $3 billion in stock.
In results published early Tuesday, JD.com said it earned an adjusted 5.30 Chinese yuan (74 cents) per American depository share on sales of 306 billion yuan ($42.5 billion) for the December-ending quarter. Analysts polled by FactSet expected JD.com to post earnings of 4.69 yuan per share on sales of just under 300 billion yuan.
Revenue increased 4% year over year while adjusted earnings per share increased 10%.
Further, JD.com announced approval for a new buyback program for up to $3 billion in stock through 2027.
On the stock market today, U.S.-listed JD stock gained 16.2% to close at 24.91.
JD Stock: Down 8% This Year
JD is among China's largest e-commerce companies, competing with Alibaba and PDD Holdings. The company also provides supply-chain technology and services.
However, JD stock has struggled for more than a year amid slowing sales growth and concerns about the broader Chinese economy. Even with Wednesday's gain, shares of JD are down 8% since the start of 2024 and are off 46% over the past 12 months.
Facing intense competition from the discount retailer PDD, JD.com has focused on offering lower costs to lure customers in. The company said its results show progress with that strategy.
"We were pleased to finish 2023 on a strong note, with upticks in both revenues and profitability for the fourth quarter," said JD.com Chief Executive Sandy Xu in a news release Wednesday. "JD's proactive actions have begun to produce results as our decisive focus on user experience, price competitiveness and platform ecosystem drives deeper and more frequent user engagement and healthier user growth momentum."
Still, the company's shares rank 22 out of 60 stocks in IBD's Retail-Internet industry group, according to IBD Stock Checkup.
JD stock has a weak IBD Composite Rating of 38 out of 99. IBD's Composite Rating combines fundamental and technical metrics for an overview of a stock's strengths. The best-rated growth stocks have a Composite Rating of 90 or better.
