Coupang Stock Slides Despite Beating Earnings Estimates
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Despite reporting third-quarter earnings and sales that exceeded analysts' expectations, Coupang stock slid in after-hours trading on Tuesday, reports Investor's Business Daily.
The South Korean e-commerce company reported earnings of 4 cents per share on sales of $7.9 billion for the September-ended quarter. Analysts polled by FactSet had projected earnings of 1 cent per share on sales of $7.8 billion.
For the same period last year, Coupang reported earnings of 5 cents per share on sales of $6.2 billion.
The stock, down over 5% in after-hours trading, might be reacting negatively to the company's adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) of $343 million, which fell short of estimates of $349 million, according to FactSet.
However, Coupang highlighted positive developments. The company stated that its Farfetch business, acquired in January, is nearing break-even, ahead of schedule. This acquisition initially weighed on earnings but is now showing signs of improvement. Excluding Farfetch, Coupang reported earnings of 6 cents per share for the quarter.
This marks a significant improvement from the second quarter, when Coupang reported a loss of 4 cents per share, attributed to Farfetch and an administrative fine.
Overall, Coupang's revenue grew 27% year over year, marking seven consecutive quarters of accelerating or steady sales growth.
"This quarter we continued the strong momentum we've seen throughout this year, delivering robust growth in revenues and margins," said Chief Financial Officer Gaurav Anand in a news release.
Despite the positive results, investors appear to be focused on the EBITDA miss and the overall market sentiment.
Coupang, founded in 2010, is South Korea's largest e-commerce company. The company has invested heavily in developing same-day delivery in the country, and its offerings also include payments technology, food delivery, and a streaming entertainment service.
Prior to the earnings report, Coupang stock gained 4.7% in Tuesday trading, bringing its year-to-date gains to 65%.