MercadoLibre reported third-quarter net income of $448 million, below the $476 million analyst estimate, while revenue and financial income rose 45% to $10.75 billion, topping expectations. Shares fell about 8% in extended trading.
MercadoLibre’s third-quarter net income rose about 6% year over year to $448 million, below the $476 million analysts expected. Operating margin fell to 6.3% from nearly 10% a year earlier, as the company expanded logistics capacity ahead of the holiday shopping season.
The company increased fulfillment capacity by about 20% from the previous quarter, compared with 10% in the same period last year. CFO Martin de los Santos said capacity-building costs compress margins before the added capacity generates revenue; he also cited free-shipping costs, marketing spending in Brazil and higher fuel prices.
Net revenue and financial income rose 45% to $10.75 billion, above the $10.66 billion analyst consensus, with Brazil leading growth. Mercado Pago’s credit portfolio grew 62% year over year, while de los Santos said the company had become more conservative in originating loans in Brazil and Argentina amid a complex credit cycle.
