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Alibaba Q2 Sales Miss Expectations, Shares Tumble

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Shares of Alibaba Group Holding Ltd (NYSE: BABA) tumbled 6 percent in pre-market trading after the company reported downbeat revenue for its fiscal first quarter. However, the company's earnings exceeded analysts' estimates.

The Chinese e-commerce giant's quarterly net income climbed 148 percent year-over-year to $4.97 billion, or $1.92 per share. Its adjusted earnings rose 21 percent to $0.59 per share.

Its revenue climbed 28 percent year-over-year to $3.265 billion. However, analysts were expecting earnings of $0.58 per share on revenue of $3.39 billion.

The average estimate among 75 Estimize users was for earnings of $0.62 per share and revenue of $3.42 billion.

Gross merchandise volumes transacted on China retail marketplaces rose 34 percent to $109 billion, while mobile GMV surged 125 percent to $60 billion.

Mobile revenue jumped 225 percent to $1.288 billion for the quarter. Revenue from China commerce retail business rose 24 percent to $2.534 billion, while revenue from China commerce wholesale business gained 41 percent to $161 million.

As of June 30, 2015, the company had RMB115,271 million (US$18,592 million) in cash, cash equivalents and short-term investments.

"We had a strong quarter and we continued to build the foundations for future growth. We focused our efforts on building healthy GMV growth, delivering the best consumer experience, and improving the quality and sustainability of merchants doing business on our marketplaces," said Daniel Zhang, Chief Executive Officer of Alibaba Group. "We are excited about our top strategic priorities, including internationalization, winning in mobile, expanding our ecosystem from cities to villages, and investing in core technologies that will propel our cloud computing business."

The company's board authorized a share repurchase program of up to US$4 billion.

Alibaba shares fell 6.01 percent to $72.69 in pre-market trading.

 

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