Mercadolibre Shares Surge 15% As Q3 Results Top Estimates, Declares Dividend

(RTTNews) - Shares of MercadoLibre Inc. (MELI) soared nearly 15 percent in extended trading on Thursday after the Argentinean e-commerce technology company reported results for the third quarter that significantly topped analysts' expectations.

The company reported a profit for the quarter that grew from last year, reflecting improved operating margins and double-digit revenue growth. The company also declared a quarterly dividend.

MercadoLibre hosts online commerce platforms in Latin America. Through its primary platforms, MercadoLibre.com and MercadoPago.com, provides solutions to individuals and companies buying, selling, advertising, and paying for goods and services online.

"Our strategic initiatives are driving value for all involved, judging by the success we are having at penetrating and promoting our e-commerce solutions across Latin America. The greater cross-usage of services provided by our ecosystem is enhancing the experience we bring to our users, and the benefits to our business are clearly reflected in our results for the third quarter of 2014," President and CEO Marcos Galperin said in a statement.

The Buenos Aires, Argentina-based company reported net income of $33.77 million or $0.76 per share for the third quarter, higher than $29.28 million or $0.66 per share in the prior-year quarter.

On average, seven analysts polled by Thomson Reuters expected the company to report earnings of $0.65 per share for the quarter. Analysts' estimates typically exclude special items.

Net revenues for the quarter grew 20.2 percent to $147.93 million from $123.06 million in the same quarter last year, and topped Wall Street analysts' consensus estimate of $130.99 million.

Net revenues surged 89.0 percent in local currencies. Excluding Venezuela, Net revenues grew 58.9 percent in local currencies. Brazil, the company's biggest market, grew revenues by 48.8 percent in local currencies.

Items sold on MercadoLibre during the quarter grew 22.3 percent to 26.9 million, driven by Brazil sold items growth of 29.2 percent.

Gross merchandise volume increase of 79.1 percent in local currencies or a 10.4 percent decline in USD, to $1.68 billion, due to the first full quarter impact of the transition to SICAD II exchange rate in Venezuela.

Total payment transactions through MercadoPago increased 48.8 percent to 12.5 million. Total payment volume surged 99.2 percent in local currencies or 52.0 percent in USD to $975.1 from last year.

Operating income margin improved 148 basis points to 31.9 percent, as total operating expenses as a percentage of net revenues declined 307 basis points, partially offset by a 160 basis points decline in gross profit margin, due higher payment processing fees amid increased penetration of MercadoPago.

The company also declared a quarterly dividend of $0.166 per share, payable on January 15, 2015 to shareholders of record as of the close of business on December 31, 2014.

MELI closed Thursday's regular trading session at $115.20, up $1.44 or 1.27% on a volume of 1.00 million shares. The stock soared a further $17.27 or 14.99% in after-hours trading.