Alibaba Group Holding Co. (BABA) - Get Report posted stronger-than-expected third quarter earnings Thursday after a record Singles Day shopping event and rising cloud computing revenues helped boost profits for Asia's biggest tech company.
Shares in the group dipped lower, however, after CEO Daniel Zhang called the ongoing coronavirus outbreak a "black swan" event that will have a "significant impact" on China's economy and present near-term challenges to the group's business development.
Alibaba said diluted non-GAAP earnings for the three months ending in December, the company's fiscal third quarter, were pegged at $2.61 per share, topping Wall Street's estimate of around $2.27 per share. Group revenues, Alibaba said, rose 38% from last year to $23.192 billion, again topping analysts' estimates of a $22.87 billion tally. Cloud computing revenues, Alibaba said, rose 62% to a record $1.5 billion.
“Our digital economy reached new heights with another record 11.11 Global Shopping Festival for our merchants and partners," Zhang said. "Continued investment in user engagement, especially through social commerce content, contributed to our strong gains in annual active consumers."
"As a result of its rapid growth, our cloud computing services for the first time generated revenue of over RMB10 billion in a single quarter. In response to the coronavirus, we mobilized Alibaba ecosystem’s powerful forces of commerce and technology to fully support the fight against the outbreak, ensure supply of daily necessities for our communities and introduced practical relief measures for our merchants," he added. "No matter past, present or future, we remain true to our mission and we will support our merchants to overcome this challenging time together."
Alibaba's U.S.-listed shares were marked 2.2% in early trading following the earnings release to change hands at $219.38 each.
Alibaba, Asia's most valuable tech group, said its '#Double 11' shopping event, better known as Singles' Day, saw 10 billion yuan ($1.43 billion) in sales over the first 90 seconds of the event, which kicked-off at midnight with a televised event featuring pop stars such as Taylor Swift and G.E.M. Singles' Day sales topped $38.379 billion in gross merchandise value as the extravaganza closed, a figure that bests last year's 24-hour total of $30.8 billion.