Alibaba Group Holding Co. (BABA) - Get Alibaba Group Holding Ltd. Sponsored ADR Report posted stronger-than-expected first quarter earnings Thursday as lockdown orders amid the coronavirus pandemic in China stoked online spending in the world's second-largest economy.
Alibaba said adjusted non-GAAP diluted earnings for the three months ending in June, the group's fiscal first quarter, were pegged at 14.82 yuan per share, an 18.1% rise from the same period last year and well ahead of the Street consensus forecast of 13.82 yuan per share. Overall group revenues, Alibaba said, rose 34% from last year to 153.75 billion yuan, or $21.76 million, again topping analysts' estimates of a 148 billion yuan tally.
On the group's online retail market place, mobile monthly active users rose to 874 million in the June quarter, an increase of 28 million from the three months ending in March.
“Alibaba delivered excellent results this past quarter. We were well positioned to capture growth from the ongoing digital transformation, which has been accelerated by the pandemic, in both consumption and enterprise operations,” said CEO Daniel Zhang.
“We mobilized our entire digital infrastructure to support the economic recovery of businesses across a wide range of sectors, while broadening and diversifying our consumer base by addressing their changing preferences in a post-COVID-19 environment," he added. "Despite these unusual times, we remain focused on the long term, on fulfilling our mission, and on creating true value for our consumers and business customers.”
Alibaba's U.S.-listed shares were marked 1.65% lower in early trading following the earnings release to change hands at $256.49 each, a move that trims the stock's year-to-date gain to around 21%.
Cloud computing revenues rose 59%, Alibab said, to $1.75 billion, "primarily driven by increased revenue contribution from both our public cloud and hybrid cloud businesses, reflecting higher average revenue per customer' as the group continues to challenge the global market dominance of Amazon's (AMZN) - Get Amazon.com, Inc. Report AWS and Microsoft's (MSFT) - Get Microsoft Corporation (MSFT) Report Azure.
“It’s easy to be blasé about Alibaba posting revenue growth of 34% in the pandemic, but it’s important to remember that Alibaba sells goods each year to the value of the GDP of the Netherlands," said Martin Garner, COO of CCS Insight. "Growing an enormous operation at this pace is an amazing achievement.”
“Like Amazon, Alibaba saw strong growth in its e-commerce businesses across countries. It also saw the flywheel effect, with increasing order frequency and rising average spend. Alibaba’s results provide good clues for other countries that much of the new behaviour we saw during the pandemic will stick as the world starts to return to normal, especially in the areas of shopping and cloud services.”