DE4CC0DE-5FC3-4494-BCBF-4D50B00366B5

Alibaba Revenue Beats On Strength In E-Commerce, Cloud Businesses

By Dayeeta Das
Share this article
Alibaba Revenue Beats On Strength In E-Commerce, Cloud Businesses

Alibaba Group Holding Ltd, the world's biggest online retailer, topped first-quarter revenue estimates on Thursday, driven by growth in its core e-commerce business.

Alibaba's US-listed shares rose about 3% in premarket trade.

The company's revenue rose 61% to 80.9 billion yuan (€10.2 billion) in the April-June period, compared with the average analyst estimate of 80.7 billion yuan (€10.1 billion), according to Thomson Reuters I/B/E/S.

Net income attributable to shareholders, however, fell 41% to 8.7 billion yuan (€1.2 billion), or 3.3 yuan per share, due to one-off costs related to share-based compensation for Ant Financials' recent fundraising.

Investments Squeeze Profit Margins

While revenue growth has accelerated since Alibaba's 2014 stock exchange listing, aggressive investment in offline retail, logistics and cloud computing has squeezed profit margins.

ADVERTISEMENT

Excluding items, the company earned 8.04 yuan per share, or $1.22 per share, missing the average estimate of 8.15 yuan per share.

Sales at Alibaba's core e-commerce business rose 61% to 69.2 billion yuan (€8.7 billion), compared with a 58% rise the same quarter a year earlier.

Revenue at its cloud computing business nearly doubled to 4.7 billion yuan (€600 million), while entertainment unit revenue rose 46.4% to 6 billion yuan (€750 million).

Alibaba also said it formed a holding company for online food delivery service Ele.me and e-commerce platform Koubei, for which it received over $3 billion (€2.6 million) in new investment commitments, including from Alibaba and SoftBank, the company said.

ADVERTISEMENT

Alibaba's core businesses include online marketplaces Tmall and Taobao and payment platform Alipay. Like most Chinese e-commerce firms, revenue is typically higher in April-June versus three months prior due to a mid-year sale which peaks on "lucky date" 18 June.

However, analysts said sales were likely lower this year due to public holidays during the event.

Last week, rival JD.com Inc said it missed targets for the event due to an unexpected slump at the end of June.

News by Reuters, edited by ESM. Click subscribe to sign up to ESM: European Supermarket Magazine.

Get the week's top grocery retail news

The most important stories from European grocery retail direct to your inbox every Thursday

Processing your request...

Thanks! please check your email to confirm your subscription.

By signing up you are agreeing to our terms & conditions and privacy policy. You can unsubscribe at any time.