Shares of Chinese delivery company ZTO Express Inc (NYSE: ZTO) fell as much as 10.6% in trading Friday after announcing fourth-quarter 2017 results. There wasn’t much of a recovery today, either, with shares trading 10% lower at 3:30 p.m. EST.
Fourth-quarter revenue jumped 35.7% to $665.7 million, topping the $640 million analysts were expecting. Adjusted net income was also up 71% to $194.5 million, or $0.28 per share, topping estimates by $0.04. While past results aren’t what left investors disappointed, guidance may have.
Management said they wouldn’t be giving revenue guidance going forward, which may have surprised investors today. But they did say that parcel volume is expected to increase 28% to 30% in the first quarter versus a year ago. Net income is also expected to be in the range of $103.0 million to $107.6 million.
Long term, I don’t think there’s anything about this earnings report that should alarm investors. ZTO Express is still growing quickly and is very profitable. But investors like to know what’s coming in the future, so less guidance may be making them uneasy today. But that’s not a great reason to sell the stock, making today a great buying opportunity for long-term investors.
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Travis Hoium has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
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