- Alibaba beat on earnings, but missed on sales.
- The company’s core commerce increased 40% year-over-year and its cloud computing increased a whopping 84% YoY.
- Watch Alibaba trade live.
Alibaba, China’s biggest e-commerce site, was up more than 3% early Tuesday after posting better-than-expected profits for the third quarter. But, quarterly revenue fell short of Wall Street estimates amid China’s economic slowdown.
The tech giant said it earned 12.19 Chinese yuan a share ($US1.77), topping the 11.21 Chinese yuan ($US1.68) that was expected by Wall Street, according to Bloomberg data. The company generated 117.3 billion Chinese yuan ($US17.1 billion) in revenue, while analysts were expecting 119.4 billion Chinese yuan.
“Our resilient operating and financial performance is a direct reflection of our persistent focus on better serving our growing base of nearly 700 million consumers across retail, digital entertainment and local consumer services,” said CEO Daniel Zhang in a press release.
“Our growth is also driven by the power of Alibaba’s cloud and data technology that helps expedite the digital transformation of millions of enterprises.”
The company said sales from core commerce increased 40% year-over-year to 102.8 billion Chinese yuan ($US14.96 billion) and its cloud-computing revenue surged 84% YoY to 6.6 billion Chinese yuan ($US962 million).
In November 2018, Alibaba‘s Singles Day event marked the biggest online-shopping day in history, with $US30.8 billion in sales in 24 hours, a significant increase from 2017, when customers spent $US25.3 billion. Despite its record-breaking sales, Alibaba Singles Day’s gross merchandise volume annual growth rate dropped from 39% to 27%, the smallest rate increase in the event’s 10-year history, signalling a weaker macro environment in China.
In the fourth quarter, China’s economy grew at a 6.4% year-over-year rate, the weakest since the financial crisis.
Alibaba was down 20% in the past twelve months.