Cloud business helps Alibaba beat revenue forecast

By on
Cloud business helps Alibaba beat revenue forecast

China's Alibaba beat Wall Street estimates for third-quarter revenue on Tuesday, as earnings from its cloud division rose 50 percent year on year.

The company's cloud division posted earnings of 16.12 billion yuan (A$3.2 billion) and recorded a positive EBITA for the first time.

Alibaba's e-commerce business benefited from a switch to online shopping triggered by the coronavirus pandemic.

The results come as China clamps down on company founder Jack Ma's business empire, having forced the suspension of a US$37 billion IPO for financial affiliate Ant Group.

In November, Alibaba's China-focused Singles Day sale - the world's biggest online shopping event that eclipses the revenues generated on U.S. shopping holidays Black Friday and Cyber Monday - registered sales of US$74 billion in November.

Alibaba's total revenue rose 37 percent to 221.08 billion yuan (US$34.24 billion) in the three months ended Dec. 31, above analysts' estimates of 214.38 billion yuan, according IBES data from Refinitiv.

Core commerce revenue from its main e-commerce sites rose 38 percent to a record high of 195.54 billion yuan, powered by the company's Chinese operations as the economy rebounded from the COVID-19 crisis.

Net income attributable to ordinary shareholders was 79.43 billion yuan, or 28.85 yuan per American depository share, compared to 52.31 billion yuan, or 19.55 yuan per ADS, a year earlier.

Alibaba also said it was "unable to complete a fair assessment" of the impact that Ant's stalled IPO will have on the company.

Authorities suspended the planned offering after Ma made public remarks criticizing the company's financial regulators in November. In December, regulators launched a separate investigation into Alibaba over alleged monopolistic practices.

Hans Chung, analyst at KeyBanc Capital Markets, wrote that the tight scrutiny from regulators was a continuing source of concern, though he thoughts the risks would be manageable.

Ma made his first public appearance in three months in January, helping allay investor concerns and boosting the company's share price.

Got a news tip for our journalists? Share it with us anonymously here.

Most Read Articles

Log In

  |  Forgot your password?