Singapore-based internet services company Sea Limited on Tuesday reported better-than-expected sales, helped by its Shopee e-commerce business. Sea stock moved higher Tuesday despite the company posting a wider-than-expected loss.
In results published before the market opened, Sea said that it lost 4 cents per share on sales of $3.73 billion for the March-ending quarter. On average, analysts projected the company would post an adjusted loss of 3 cents per share on sales of $3.64 billion, according to FactSet.
Sales increased 22.8% year over year while the company swung to a loss from earnings of 15 cents per share in Q1 2023.
On the stock market today, Sea stock gained 2.8% to close at 68.07.
E-Commerce Revenue Up 33%
Sea's holdings include the e-commerce focused Shopee, which services Southeast Asia and Taiwan. The company also owns digital-payments provider SeaMoney and Garena, a global online games developer.
Shopee is Sea's largest business. The e-commerce arm has been challenged in recent quarters by growing competition from online retailers based in China. The list includes Alibaba Group's AliExpress, PDD Holdings' Temu and TikTok Shop.
Sea stock sank late last year after the company warned it would need to spend more on marketing and other efforts to ward off challengers. But Sea shares have had a good start to 2024, helped by a strong fourth-quarter earnings report in March. Analysts are also increasingly positive on the stock and Sea's ability to handle competition in Southeast Asia.
E-commerce sales growth accelerated this quarter for Sea. Gross merchandise value for goods sold on the platform increased 36% year over year to $23.6 billion. Total e-commerce revenue advanced 33% year over year to $2.7 billion. E-commerce revenue grew 23% year over year in the December quarter.
"Shopee delivered strong growth this quarter, achieving its highest ever quarterly orders, GMV, and revenue," Sea Limited Chief Executive Forrest Li said in a news release.
Revenue from financial services, meanwhile, increased 21% year-over-year to $499.4 million, the company said.
The company's Garena gaming arm, however, saw a 15% year-over-year decline in sales to $458 million. Garena's most famous title is Free Fire.
Sea Stock: Technical Ratings
With Tuesday's gain, Sea shares have surged 64% this year. Still, Sea stock is down 22% over the past 12 months.
Coming into the report, Sea stock had a so-so IBD Composite Rating of 68 out of 99, according to IBD Stock Checkup. The score combines five separate proprietary ratings into one rating. The best growth stocks have a Composite Rating of 90 or better.
But Sea stock's IBD Relative Strength Rating is a much stronger 87 out of 99.
