Alibaba Profit, Revenue Increase -- Update
May 05 2016 - 8:49AM
Dow Jones News
By Alyssa Abkowitz in Beijing and Anne Steele
in New York
Chinese e-commerce giant Alibaba Group Holding Ltd. said
Thursday its fiscal fourth quarter net profit surged 86% from a
year earlier, boosted by disposal gains on investments and
businesses.
Alibaba said net profit for the three months ended March 31 rose
to 5.37 billion yuan (US$832 million) from 2.89 billion yuan a year
earlier. Revenue rose 39% to 24.18 billion yuan from 17.43 billion,
beating analysts' expectations of 23.2 billion yuan.
Gross merchandise volume -- a key metric that determines the
growth rate of e-commerce companies -- fell to 742 billion yuan at
the end of March from 964 billion yuan at the end of December,
which included Alibaba's biggest retail day, Singles Day. That
number includes shipping costs and confirmed, but not successfully
closed, orders. Mobile GMV accounted for 73% of total GMV, up from
51% a year earlier.
Despite robust revenue growth, Alibaba continues to face
headwinds. Competitor JD.com Inc. has been gaining market share,
with its revenue growth outpacing Alibaba for the past six
quarters. At the same time, Alibaba continues to throw money at
deals such as its recent $1 billion investment in Southeast Asian
e-commerce startup Lazada Group and its $266 million purchase of
Hong Kong-based newspaper South China Morning Post. Some investors
have questioned how several of the e-commerce giant's tie-ups fit
into the company's overall strategy and it also continues to face
criticism on its handling of counterfeit goods on its
platforms.
"Competition may have an impact on the company's growth," said
Henry Guo, an analyst at ITG Investment Research, referring to
Alibaba's ventures into on-demand services such as food delivery
and travel.
Shares in the company added 4.9% premarket to $79.50. The stock
had fallen 4.7% over the past year amid concerns of an economic
slowdown in China. Despite those concerns, Alibaba has seen growth
in sales and number of users, and online shopping has remained
resilient through the first quarter, analysts at Nomura Securities
said in a recent note.
"We showcase resiliency and growing clout of Chinese consumers,"
Maggie Wu, chief financial officer, said in a statement.
During the quarter, growth in China's rural landscape increased,
with Alibaba having a presence in more than 14,000 rural villages,
up from 12,000 villages during the previous quarter. Cross-border
imports continued to help transaction volume on Tmall Global, with
more than 100 international brands, including Costco and Macy's,
bringing goods to Chinese consumers, Alibaba said. The company also
made strides in cloud computing business, with revenue increasing
to 1.1 billion yuan, up 175% year over year.
Alibaba said it repurchased and canceled 5.8 million shares for
about $365 million in the fourth quarter.
Write to Alyssa Abkowitz at alyssa.abkowitz@wsj.com and Anne
Steele at Anne.Steele@wsj.com
(END) Dow Jones Newswires
May 05, 2016 08:34 ET (12:34 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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