New York-listed shares of Alibaba fell 11% on Thursday, after reporting disappointing revenue and earnings for the third quarter, and warning that results for the year would be lower than estimates.
Alibaba’s revenue jumped 29% last quarter from a year ago, to $31.1 billion. Wall Street expects revenue of $32.1 billion. Earnings per share fell 38% from a year ago and were below expectations.
The company says sales for the current financial year will be up 20% to 23% from a year ago. Analysts are predicting a growth of nearly 28%.
In its earnings announcement on Thursday, Alibaba cited “regulatory environment affecting Alibaba’s business” and “regulations and concerns about privacy and data protection” as some of the uncertainties the company is facing.
Even so, Alibaba’s massive cloud business continues to deliver impressive results. That unit’s revenue was up 33% from a year ago. Alibaba Cloud has also helped the company expand beyond China.
“Alibaba continues to invest firmly in our three strategic pillars of domestic consumption, globalization and cloud computing to establish a strong foundation for our long-term goal of sustainable growth. firmly into the future,” Alibaba Chairman and CEO Daniel Zhang said in a statement.
“In the midst of an unprecedented year after tight regulation without much flexibility, [Alibaba] It will be necessary to overcome many obstacles while continuing to invest in technological innovation, globalization and expanding consumer reach, Citi analysts said in a research note on Friday. domestic.
Alibaba’s results come a week after the company wrapped up its annual Singles Day online shopping spree. Chinese consumers continued to shop for bargains during the event, but the platform’s sales growth was slower than last year.
Part of that may be due to the regulatory environment, but Alibaba is also facing stiffer competition as well as a slowdown in the Chinese economy.
During a conference call with analysts on Thursday, Zhang said “economic difficulties, coupled with intensifying market competition, are also affecting our core commercial business in China.” Country.”
He noted that there was a slowdown in apparel and general merchandise, but demand for consumer electronics and furniture remained resilient.
On Friday in Hong Kong, shares of JD.com jumped more than 6%.
“Consumers and business partners increasingly trust and rely on JD, and we were able to surpass industry growth in China in the third quarter,” said JD.com president Lei Xu. know in the income statement.
JD.com’s Hong Kong-listed shares have gained more than 20% in the past six months, while Alibaba’s shares have fallen more than 30% in the same time frame.
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