Alibaba is surging after an earnings beat

Shares of Alibaba surged by more than 7% in pre-market trading Thursday after the company posted quarterly earnings above expectations.

The Chinese e-commerce company reported quarterly sales of $US2.8 billion, a 45% increase from the previous year, beating the estimate for $US2.6 billion according to Bloomberg.

The company posted adjusted earnings per share of $US0.43, beating the estimate for $US0.42.

“Alibaba had a strong quarter with significant growth across our key operating metrics,” said Jonathan Lu, Chief Executive Officer of Alibaba Group. “We grew revenue, gross merchandise volume and annual active buyers, and we expanded our unrivalled leadership position in mobile.”

The company also announced Daniel Zhang as its new CEO, replacing Jonathan Lu.

Shares of Alibaba fell to an all-time low on Tuesday.

In an earnings preview, Morgan Stanley analysts noted a recent speech by Alibaba Jack Ma in which he said said he expects a headcount freeze in 2015.

That could be interpreted to mean the company expects its earnings to be strained, the analysts said.

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