BEST Inc. (NYSE: BEST) posted third-quarter financials that missed expectations, as the pandemic played a toll on the company’s performance.
The Hangzhou-based logistics provider announced Thursday aftermarket that revenue edged down 0.6% year-over-year to $1.28 billion, while Non-GAAP loss per share was 23 cents. According to Seeking Alpha, revenue missed by $90 million, while its Non-GAAP earnings missed by 14 cents per share.
"We had a challenging third quarter amid intensified industry competition,” Johnny Chou, the founder, chairman, and chief executive officer of BEST, said in a statement.
He added, “Our Express segment execution did not meet the fast-changing market dynamics in both operation and pricing strategy, which led to lower volume growth and margin.”
Despite the disappointing financials, some good came out of the quarter. BEST Freight, the company’s second-largest revenue generator, achieved a growth rate “significantly higher than industry-wide average”, said Chou on the earnings call. Freight delivery volume leaped 31% year-over-year to more than 2.5 million tonnes, as the company’s strategy of focusing on e-commerce related volume bore fruit.
Turning towards BEST’s online truck-hailing segment in the quarter, registered drivers on its UCargo mobile app skyrocketed 85% while the total number of transactions jumped by 37% year-over-year.
Going forward, BEST said it is making “major strategic adjustments” and "organizational changes” to the company in hopes to put it back on a more profitable path.
“Going into the second-half of 2020, we remain focused on increasing market share, investing in automation, and further integrating dynamic routing with Freight to enhance operational efficiencies and improve profitability,” Chou said on the earnings call.
While BEST did not provide revenue or earnings guidance, Chou said he expects freight to continue to grow in the “30% range.”
In early trading Friday, BEST was down 4% from Thursday’s close at $2.89 per American depositary share.
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