MercadoLibre Drops 5% After $10.2 Billion Q2 Revenue as Credit Costs Weigh
Updated
Updated · Yahoo Finance · Aug 7
MercadoLibre Drops 5% After $10.2 Billion Q2 Revenue as Credit Costs Weigh
3 articles · Updated · Yahoo Finance · Aug 7
Summary
$10.2 billion in second-quarter revenue marked MercadoLibre’s first quarter above $10 billion, yet the stock still fell 5% after earnings and had been down as much as 8% intraday.
50% year-over-year revenue growth was its fastest quarterly top-line increase in four years, but rougher profitability muted the market reaction despite results that still beat expectations.
75% growth in the company’s credit portfolio over the past year lifted near-term loss provisions, as MercadoLibre pushes deeper into credit cards and loans through Mercado Pago.
Brazil also pressured margins, with MercadoLibre matching aggressive promotions and free-shipping offers from foreign rivals to defend its e-commerce position.
30 consecutive quarters of at least 30% revenue growth underscore the company’s expansion, but the sell-off reflects investor concern that faster growth is coming with higher credit and competitive risk.