Alibaba Group Holding Ltd. (BABA) - Get Alibaba Group Holding Ltd. Sponsored ADR Report posted stronger-than-expected earnings for its fiscal fourth quarter as the Chinese e-commerce giant continues to challenge Amazon Inc. (AMZN) - Get Amazon.com, Inc. Report for customer growth in key Asia markets.
Alibaba said non-GAAP net income for the three months ending in March, its fiscal fourth quarter, came in at $1.18 billion, down 29% from the same period last year but largely as a result of "non-recurring disposal gains" booked in the fourth quarter of 2017, primarily the sale of its stake in Chinese internet firm Momo.
Alibaba has recently been spending heavily on acquisitions to expand abroad and into physical retail. In March, it announced it was investing an additional $2 billion in Lazada Group, the leading Southeast Asian e-commerce firm.
Non-GAAP earnings per share for the quarter were $0.90 per share, a 32% increase from the same period last year and ahead of the FactSet consensus forecast of $0.85 per share.
Group sales rose 61% to $9.73 billion, the company said, topping the expected $9.3 billion estimate and the company sees organic revenue growth of around 50% in the fiscal year that ends in 2019, a figure that largely matches the growth rate for the year that ended in March. Alibaba's cloud business revenues more than doubled in the quarter from the year-ago period.
"Alibaba Group had an excellent quarter and fiscal year, driven by robust growth in our core commerce business and investments we have made over the past several years in longer-term growth initiatives," said CEO Daniel Zhang. "With the continuing roll out of our New Retail strategy, our e-commerce platform is developing into the leading retail infrastructure of China."
Alibaba shares initially rose as much as 4% in pre-market trading in New York, but gains moderated and shares actually were down 1.3% at the open. By mid-day, shares had rebounded 3.3% to $188.42. Shares are up more than 50% over the last 12 months.
Alibaba is not only growing revenues at nearly three times the pace of it U.S. rival, but it is also enjoying healthier profitability, with a fourth quarter operating margin of 15% compared to 3.8% for the Seattle, Wash.-based Amazon.
Alibaba, which was co-founded by billionaire Jack Ma, Asia's richest man, had 617 million monthly active users on its mobile platform at the end of March, the company said, up 22% from the same period last year and 6% ahead of the quarter that ended in December. The company also said its number of annual active consumers reached 552 million in the quarter.
Earlier this week, noted short seller Andrew Left of Citron Research made an unusual bullish call on Alibaba, calling it "the most compelling growth story in the market." According to Left, Alibaba is the most heavily shorted stock in the world, but noted that "nothing is going to derail this company from going to $250 in the near term."