Mercado Libre announced yesterday that its profits doubled in 2023. However, the fourth quarter result was lower than market expectations, which made the shares of Marcos Galperín’s company collapse of 12% this Friday on Wall Street.
In New York, Mercado Libre’s ADR leads the decline in Argentine stocks, but the trend is negative for most stocks, albeit with much more muted declines. Edenor collapses by 3.2%, followed by IRSA with -2.5% and Telecom with -2.1%.
Argentine stocks tumble after several days of positive results, which also included bonds. Dollar government bonds fell about 1% today, but have racked up gains of 14% this month.
Yesterday Mercado Libre announced earnings per share of US$19.64 as of global revenue of $14,473 million across the 18 countries in which it operateswhich represents a 37.3% jump compared to 2022. This led it to achieve the best financial result in its 19-year history.
Based on its e-commerce and financial services operations, Last year Mercado Libre achieved a record net profit of $987 million, an improvement of 104.7% compared to the previous year’s result.
However, according to the earnings report presented by the company, in the fourth quarter of last year it recorded a net profit of $165 million, identical to that achieved in the same period of 2022.
This latest information shocked investors, who expected a better result in that period, which led the shares to fall by 12% on Wall Street today.
Despite this, the company celebrates its financial results. “We consider 2023 an important year for MercadoLibre. Notable not only for our growth rates, significant market share gains and significant margin expansion, but also as evidence of this our long-term strategy is bearing fruit“, they underlined in a statement.
The reason why higher fourth quarter sales didn’t translate into higher net profits es the impact of two extraordinary tax provisions in Brazil of $351 million. In any case, the company assured that these provisions “are not expected to have a material impact in the future”.
At Mercado Pago, the company’s financial services arm, revenue rose 34%, driven by an acceleration in lending.
As far as customers are concerned, MercadoLibre has reached the 218 million active unique users, compared to 148 million at the end of 2022.
Source: Clarin
