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Alibaba Tops Q2 Earnings Forecast, Revenues Rise 30%, Beating Yuan Forecasts But Missing U.S. Dollar Estimates

Alibaba Holding Group said its second quarter revenues jumped more than 30% from last year to a U.S. dollar equivalent of $22.8 billion.

Alibaba Group Holding Ltd.  (BABA) - Get Alibaba Group Holding Ltd. Report posted stronger-than-expected second quarter earnings Thursday as core e-commerce revenues jumped by nearly a third following China's easing of coronavirus lockdown restrictions. 

Alibaba said diluted non-GAAP diluted earnings for the three months ending in September, the group's fiscal second quarter, were pegged at $4.83, down 63% from the same period last year but firmly ahead of the Street consensus forecast of $2.08 per share. Group revenues, Alibaba said, rose 30% to a U.S.-dollar equivalent $22.838 billion, but came in just shy of analysts' estimates of a $23.19 billion tally.  

In Chinese yuan terms, Alibaba revenues were pegged at 155.06 billion, compared to a Refinitiv forecast of 154.74 billion.

“Alibaba had another strong quarter. We continued to help businesses recover and find new opportunities for growth through digitalization in the post-pandemic landscape. The solid performance of our core commerce and robust growth of Alibaba Cloud are the direct results of our commitment to value creation for customers,” said CEO Daniel Zhang. “We remain focused on our three long-term growth engines – domestic consumption, cloud computing and data intelligence, and globalization – to effectively capture opportunities from the ongoing changes in consumer demand and acceleration of digitalization of businesses across our digital economy.”  

Alibaba's U.S.-listed shares were marked 3.5% lower in early trading immediately following the earnings release to change hands at $285.50 each.

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Revenues from the tech group's burgeoning cloud business rose 60% to 27.24 billion yuan, Alibaba said, compared to a 31% growth rate for it core commerce business, which hit 264.24 billion yuan.

“Alibaba’s 60% growth of the cloud business, a small further acceleration from the previous quarter, is another testament for the swift digital transformation of the post-pandemic life in China,” said Marina Koytcheva VP of forecasting at CCS Insight.

“The split of the 11.11. shopping festival into two “shopping windows”- one from the 1st to the 3rd of November, and one on the original date of 11th of November- reflects the great popularity of these events in China, and Alibaba has clearly looked for a way to make sure its technology and logistics infrastructure can cope with what we can expect to be a colossal retail rush next Wednesday, “ she added. 

Earlier this week, Alibaba shares fell the most in at least two years after officials on the Shanghai Stock Exchange suspended the pending $37 billion listing of Ant Group, which is 33% owed by Alibaba, after it failed to meet pre-set rules for providing timely information.

Ant Group, a digital payments company founded by Ma in 2014, was set to list around 11% of its equity on both the Shanghai and Hong Kong stock exchanges this week in what would have been the world's biggest IPO. 

Bookbuilding suggested the Hong Kong portion of the listing could value Ant Group at more than $300 billion.