Alibaba Group Holding Ltd (NYSE: BABA)
Alibaba shares jumped 3.6% before the opening bell in New York on Thursday, after the Chinese e-commerce giant reported better-than-expected fiscal first-quarter financial results.
Its core commerce unit helped push revenue 61%, but net earnings dropped 41% due to a one-time stock compensation charge of 11.2 billion yuan related to its Ant Financial Services Group.
The massive revenue was aided partly by an increasingly growing consumer base in China, with the number of active users rising by 24 million during the quarter. Alibaba now has 576 million active users, a figure higher than the entire population of the US.
Revenue from its entertainment and digital-media unit grew 46%, as sales from its cloud-computing operations nearly doubled to 4.7 billion yuan. The company also announced that it would invest $3 billion into its food delivery business, with the help of SoftBank Group Corp.
Net income during the quarter was 8.7 billion yuan, the equivalent of $1.27 billion, compared with 14.7 billion yuan in the first quarter of last year. After stripping out special items, adjusted earnings per share came in at 3.3 yuan, handily surpassing expectations of 2.57 yuan.
Revenue during the three months to June 30 was 80.9 billion yuan, compared with 50.18 billion yuan in the same quarter the previous year. Analysts expected the company to report revenue of 80.75 billion yuan.
Alibaba CEO Comments
Daniel Zhang, Chief Executive Officer of Alibaba Group said, “Alibaba had another excellent quarter, with significant user expansion and even more robust engagement across our growing ecosystem. Our China retail marketplace business continues to gain share, with New Retail initiatives driving further revenue growth and enabling our retail partners to seamlessly serve customers.”
“We are executing our plan of providing more value and choice to users along the consumption continuum, with digital entertainment and local service offerings that tap into big addressable markets beyond core commerce. We will continue to invest in strategic business opportunities and innovation to sustain our competitive advantage and for long-term growth,” concluded Zhang.
Alibaba Group Holding Company Profile
Alibaba Group Holding Ltd. is engaged in the provision of online and mobile marketplaces in retail and wholesale trade. It operates through the following segments: Core Commerce, Cloud Computing, Digital Media and Entertainment, and Innovation Initiatives and Others. The Core Commerce segment comprises platforms operating in retail and wholesale.
The Cloud Computing segment consists of Alibaba Cloud, which offers elastic computing, database, storage and content delivery network, large scale computing, security, management and application, big data analytics, a machine learning platform, and other services provide for enterprises of different sizes across various industries.
The Digital Media and Entertainment segment includes the Youko Tudou and UCWeb media properties. The Innovation Initiatives and Others segment involves in the YunOS, AutoNavi, DingTalk, and other businesses. The company was founded by Chung Tsai and Yun Ma on June 28, 1999 and is headquartered in Hangzhou, China. –CNNMoney