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Temu Parent PDD Second-Quarter Earnings Top Views; Revenue Falls Short

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Temu Parent PDD Second-Quarter Earnings Top Views; Revenue Falls Short

PDD (PDD) reported second-quarter earnings ahead of Wall Street estimates on Monday even as operating expenses rose annually, though revenue fell short of expectations.

The Chinese e-commerce platform posted adjusted earnings of 19.33 renminbi ($2.88) per American depositary share for the June quarter, down from 22.07 renminbi the year before. The FactSet-polled consensus was for 18.45 renminbi.

PDD's Nasdaq-listed American depositary receipts edged 0.5% higher in Monday trade. The company owns the Pinduoduo social commerce platform in China and Temu, an e-commerce marketplace in North America.

Revenue gained 8% to 112.36 billion renminbi, but trailed the Street's view of 115.09 billion renminbi. Revenue from online marketing services improved to 57.64 billion renminbi from 55.7 billion renminbi in the prior-year period, while transaction services climbed 13% to 54.72 billion renminbi.

"Total revenue came in below consensus mainly due to softer transaction service partially offset by better online marketing," Jefferies equity analysts Thomas Chong and Zoey Zong said in a note emailed toon Monday. The consensus for transaction services revenue growth was about 22%, according to the brokerage.

Total operating expenses rose 13% to 36.58 billion renminbi, mainly due to higher sales and marketing costs, PDD said.

"We stepped up our ecosystem investments in the second quarter," Vice President of Finance Jun Liu said. "At this stage, our priority is helping merchants thrive and strengthening the broader industry ecosystem."

Last week, Chinese e-commerce giant Alibaba (BABA) reported weaker-than-expected fiscal first-quarter earnings as it continued to spend heavily to build artificial intelligence infrastructure. Earlier in August, JD.com (JD) recorded second-quarter results above expectations.

In the US, Amazon.com (AMZN) reported second-quarter results ahead of market views last month amid cloud-computing business strength. E-commerce company eBay (EBAY) beat quarterly estimates earlier in August.

Price: $88.42, Change: $+0.04, Percent Change: +0.04%

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