Alibaba quarterly profits almost double to $1.55 bn

Alibaba quarterly profits almost double to $1.55 bn

Alibaba quarterly profits almost double to $1.55 bn

Alibaba's investments in new business areas, such as entertainment, digital media and cloud computing, appear to be paying off with revenue growth across the board. This U.S. push follows a meeting between Chairman Jack Ma and U.S. President Donald Trump earlier this year, at which Ma pledged to create one million jobs in the country.Revenue from Alibaba's core e-commerce business rose 47 percent to 31.6 billion yuan in the first quarter, up from the previous quarter's growth rate of 45 percent.Last year, Alibaba bought back and canceled roughly 27 million shares, with a large portion coming from early investor Softbank Group Corp (9984.T), for about $2 billion.

Alibaba Group Holding Ltd.'s earnings lagged estimates after it swallowed a higher tax bill and splurged on the entertainment and cloud computing businesses that're fueling revenue growth.

Alibaba's shares fell 2.7 per cent Wednesday in NY trading before earnings were announced.

The company said Thursday that net income attributable to ordinary shareholders for the fiscal fourth quarter ended March 31 was 10.65 billion yuan, or $1.55 billion, almost double the amount from the like quarter one year ago.

Alibaba's American depositary shares fell 2.8% to $117.35 in morning trading in NY, but are still up 33% this year.

"The March quarter is usually a slow season for e-commerce so margins usually come down a bit", said Ray Zhao, a Shenzhen-based analyst at Guotai Junan Securities Co.

While Chinese consumption remains strong, the world's second largest economy showed signs of cooling as retail sales and industrial output growth sputtered in April with regulators cracking down on swelling financial leverage.

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Alibaba has ramped up expansion outside of China and consolidated its Southeast Asian retail site Lazada, which it acquired past year.

Alibaba is trying to appeal to a growing middle class demanding premium products from Alaskan salmon to New Zealand milk.

Alibaba's revenue figure beat the $5.3 billion forecast by analysts surveyed by S&P Global Market Intelligence, but earnings per share narrowly missed estimates at 4.35 yuan, or $0.63. Growing Chinese affluence is propelling billionaire founder Jack Ma's global expansion, which include helping a million American businesses tap Chinese consumers and reaching foreign shoppers through AliExpress.

Revenue at Alibaba's digital media and entertainment division more than tripled to $571 million as the firm consolidated sales from its online video acquisition of Youku Tudou.

Alibaba has said it also plans to expand internationally for future growth.

Cloud computing revenues also surprised positively, soaring 103% compared to a year ago, while growth from Lazada and AliExpress also accelerated.

"Our robust results demonstrate the strength of our core businesses, as well as the positive momentum of our emerging businesses", said Maggie Wu, the firm's chief financial officer.

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