Thursday Tech Briefing: Growth Slows at Alibaba
- Author: Eleanor Harrison Feb 01, 2019,
Feb 01, 2019, 1:48
Chinese e-commerce giant Alibaba's revenue grew at its slowest pace in three years last quarter, as the ongoing US-China trade spat and a general slowdown in the region weighed heavily on its busiest period.
Businesses worldwide are bearing the brunt of slowing growth in China, which has generated a third of global growth in recent years. -China trade war and more cautious spending overall.
Meanwhile, its record-breaking Singles Day event proved it has muscle, and its Ant Financial and Alibaba Cloud "are the two most likely to move the needle in the foreseeable future", according to the UBS team.
For the third quarter, Alibaba reported revenue of Dollars 17.05 Billion, increasing 41% year-over-year, while earnings was USD 1.77 per share.
That compares with an estimate for revenue of 118.9 billion yuan (€15.40 billion) from 31 analysts polled by Refinitiv.
Net profit reached $4.9 billion in the October-December third quarter.
In today's statement, Alibaba also reminded investors of its $6 billion share buyback plan launched in September. They have slumped 16 per cent in the past 12 months but have rallied so far this month.
"Alibaba had another strong quarter". But as Reuters' Grace Lee reports, despite the strong numbers, the company's still being hit hard by the trade war.
Alibaba's quarterly revenue was driven by the growth in its core commerce and cloud computing.
In November last year, Alibaba's Single Day reported sales of Dollars 30.8 Billion in just 24 hours, increasing from USD 25.3 Billion compared to the year before. Annual growth, however, dropped to the weakest rate in the event's 10-year history as the Chinese economy grew at its weakest pace in almost three decades.
China's economy posted a 6.6% expansion in 2018, the slowest in 28 years, as factory activity and domestic demand tapered.
Alibaba also cut its revenue growth forecast for the 2019 fiscal year ending in March this year by about 5%.
On the same call, Zhang said the company remains optimistic despite facing uncertainties, adding that younger buyers were driving sales.
Chinese consumers are spending strongly despite an economic slowdown, the chief executive of Alibaba said yesterday.
Revenue growth slowed to 41 percent in the quarter, with sales in its core e-commerce business coming in at 40 percent.