In This Article:
(Bloomberg) -- Shares of MercadoLibre Inc. rallied after the Latin American e-commerce and fintech giant’s profit far surpassed estimates.
Most Read from Bloomberg
-
Trump Targets $128 Billion California High-Speed Rail Project
-
Trump Asserts Power Over NYC, Proclaims ‘Long Live the King’
-
Sorry, Kids: Disney’s New York Headquarters Is for Grown-Ups
Net income in the fourth quarter was a record $639 million compared with a $406 million median estimate from analysts, according to data compiled by Bloomberg. The $6.1 billion of revenue in the quarter also beat expectations. The stock jumped as much as 12.5% at the open of trading in New York.
The strong finish to the year comes after a third quarter that disappointed investors prompting a selloff after multiple profit metrics missed on the back of increased investments in logistics and credit. Shares in Latin America’s most valuable company, with a market value of about $119 billion, have rebounded strongly, gaining 37% year-to-date.
“It was a very good quarter. We thought we had a very good quarter last quarter as well. It doesn’t go in a straight line,” Chief Financial Officer Martin de los Santos said in an interview. “This was probably the best year in our history in terms of financial results, operational results, the improvements that we have made on the product.”
MercadoLibre’s full year profit jumped to $1.9 billion in 2024 on $21 billion of revenue, which rose 38% year-on-year, according to the release.
For the fourth quarter, while gross merchandise volume of $14.5 billion came in below estimates, the total payment volume of $59 billion was largely in line with expectations.
The company which gets the bulk of its business from Brazil, Mexico and Argentina grew its assets under management to $10.6 billion and its credit book to $6.6 billion with the credit card portion of the portfolio more than doubling in the past year, according to a press release.
Still, MercadoLibre executives said in a call with analysts that they’re remaining cautious on credit given macroeconomic uncertainty in Brazil where interest rates are set to climb further.
In Argentina, where President Javier Milei is undertaking dramatic spending cuts and reforms to try to quash inflation and stabilize the economy, MercadoLibre has “quadrupled” its credit book in the past year through loans for consumers and merchants, de los Santos said. Though the company isn’t yet ready to begin offering credit cards in that market, he said.