What happened
Shares of JD.com (JD 6.12%) were falling today after the Chinese e-commerce company issued a second-quarter earnings report that beat estimates, but broader fears about China weighed on the stock.
As of 11:58 a.m. ET on Wednesday, the stock was down 3.2%.
So what
JD, which is China's biggest direct online retailer, said that revenue in the quarter rose 7.6% to $39.7 billion, which topped estimates at $38.71 billion. Service revenue, which includes its third-party marketplace and logistics businesses, was up 30.1% to $7.5 billion.
Sales growth was driven in part by electronics and home appliances, while sales of general merchandise, including groceries, fell.
Adjusted operating income rose by 50% to $1.2 billion, and operating income in its new businesses, like JD Property and overseas businesses, turned positive with the help of a gain on the sale of development properties.
On the bottom line, adjusted earnings per share rose 33% to $0.74, which topped the analyst consensus at $0.66.
CEO Sandy Xu said, "We are also encouraged to see the number of our marketplace merchants more than doubled and reached a new record during the quarter, reflecting our efforts to build a superior marketplace ecosystem, one of our priorities to provide customers with enriched supplies at better prices."
Now what
JD doesn't provide guidance, but second-quarter revenue growth accelerated from the first quarter, a sign that the worst of the headwinds in China, including the tech crackdown, zero-Covid policy, and the economic slowdown, could be over.
Last week, Alibaba also posted accelerating revenue growth in its second-quarter report as well.
But economic data out of China continues to be weak, meaning growth could remain sluggish for JD as well. While the company still has a lot of growth potential, it's ultimately subject to the health of the Chinese economy, and that's still a primary investor concern.
