On Thursday, MercadoLibre, the Latin American e-commerce giant, reported a quarterly net profit that exceeded expectations, nearly quadrupling from the previous year. This stellar performance drove its shares up over 12% in after-hours trading.
The company's net income for the October-to-December quarter reached $639 million, a 287% increase year-on-year, surpassing analysts' expectations. The surge was attributed to lower funding costs, improved logistics efficiency in Mexico, and reduced currency losses in Argentina.
MercadoLibre's net revenue stood at $6.1 billion, up 37% year-on-year, outperforming estimates. The gross merchandise volume saw an 8% rise, fueled by a 32% growth in its primary market, Brazil.
Post-market trading saw MercadoLibre's New York-listed shares surge nearly 13% to around $2,380.
Jefferies analysts noted, "A solid beat with higher top line and much better margins." The company's strategic focus on investing in growth opportunities was emphasized, aiming to dilute fixed costs in the long term and sustain profitability.
Earnings before interest and taxes for the quarter ending in December reached $820 million, surpassing analysts' expectations and marking a 144% increase from the previous year. MercadoLibre's credit portfolio grew to $6.6 billion, with a decrease in the 90-day-plus default ratio.
Management's cautious approach to credit management was highlighted by Osvaldo Gimenez, aiming to mitigate risks in specific segments in response to economic uncertainties.
The Jefferies analysts commended MercadoLibre's proactive measures to address credit risks and maintain reassuring credit performance.