Published: Fri, February 01, 2019
Markets | By Erika Turner

Alibaba earnings top estimates but revenue misses

Alibaba earnings top estimates but revenue misses

E-commerce giant Alibaba Group Holding Ltd's quarterly revenue grew at its weakest pace in three years, as the impact of a slowing China and a crippling Sino-US trade war kept buyers away during its top-sale season.

That compares with an estimate for revenue of 118.9 billion yuan from 31 analysts polled by Refinitiv.

Much anticipated regulation of e-commerce in China isn't likely to be very disruptive, and the economy is poised to improve a bit later this year, according to a note from UBS analysts emailed to Retail Dive.

Alibaba saw net income jump 33pc to 30.96bn yuan (£3.5bn) in the three months to the end of December, and revenue rose 41pc to 117.28bn yuan.

The cloud computing segment saw a massive gain in revenue for the quarter, with revenues growing 84% year over year to $962 million, primarily driven by increased spending from enterprise customers.

The results propelled the shares of NY listed Alibaba to gain more than 6%, to US$166.82. "Our resilient operating and financial performance is a direct reflection of our persistent focus on better serving our growing base of almost 700 million consumers across retail, digital entertainment and local consumer services", said Daniel Zhang, Chief Executive Officer of Alibaba Group.

Venezuela power struggle heats up with Guaido curbs, protest plans
The high court, which is stacked with supporters of disputed president Nicolas Maduro , also blocked Guaido's financial accounts. Maduro accuses the opposition of staging a coup and says the U.S. is waging an economic war aimed at removing him from power.

The company said that Alibaba Cloud will leverage the overall company's technologies for infrastructure, data management and services to broaden its services for enterprises.

On Tuesday, China's Ministry of Industry and Information Technology (MIIT) reported that revenue growth rates for domestic technology companies did not rise in 2018, and that consumer spending had slowed amid increased economic pressures. The company is valued at about $430 billion.

Alibaba also cut its revenue growth forecast for the 2019 fiscal year ending in March this year by about 5%.

China's economy posted a 6.6% expansion in 2018, the slowest in 28 years, as factory activity and domestic demand tapered.

"As Chinese consumers upgrade their lifestyles, they will purchase higher-quality products as well as more services and entertainment", CLSA said, adding that Alibaba was well-placed to profit from this.

Like this: