Alibaba’s earnings per share in the last quarter exceeded analysts ‘ expectations, although the company’s profits missed estimates. The Chinese e-commerce giant announced on Tuesday that its Increase share buyback program from $ 10 billion to $ 15 billion.
But this could not convince investors: Which Shares fell 0.8% in premarket trading in the US, after the Hong Kong-listed Alibaba shares rose 0,83% before the profits were released. Like Amazon, the results of the Chinese e-commerce giant also show, that sales growth has slowed. From 64% year-on-year in the first three months of 2021 to 34% in the last quarter.
Alibaba generated sales of 205.7 billion Chinese yuan ($31.8 billion)in the three months to the end of Junewhich the Company reports as the first fiscal quarter of 2021. Sales figures fell short of analysts ‘ estimates of RMB 251 billion.
Alibaba Q2 2021 Quarterly Report
However, the bottom line was still good, as adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) amounted to RMB 48.6 billion. This is a decrease of 5% compared to the previous year, but above the expected RMB 46.7 billion of Wallstreet analysts. Profit margins were another standout feature for the e-commerce giant, with an adjusted EBITDA margin of 24% exceeding estimates.
“In the June quarter, global annual active consumers across the Alibaba ecosystem reached 1.18 billion, an increase of 45 million from the March quarter, which includes 912 million consumers in China,” said Daniel Zhang, chairman and CEO of Alibaba.
„We believe in the growth of the Chinese economy and the long-term value creation of AlibabaZhang added. „We will further strengthen our technology edge by enhancing the consumer experience and helping our enterprise customers make successful digital transformations.“
Alibaba also announced plans to increase the scope of its share buyback program by 50% from $ 10 billion to $ 15 billion. Earnings growth for Alibaba’s closely watched Cloud Computing segment, which is an alternative to its core e-commerce offerings and positions the company as a rival to Amazon and Microsoft, continued at a high pace.
Revenue in the cloud division increased by 29% year-on-year. Adjusted EBITDA was RMB 340 million.In the last quarter, adjusted EBITDA in cloud computing was RMB 308 million with a margin of 2%.
Growth in cloud computing was driven primarily by robust revenue growth with customers in the internet, financial services and retail sectors, Alibaba said.
The company’s profits come at a difficult time for China’s technology giants. The sector has been the subject of regulatory action, which has intensified in recent weeks, and the largest monthly decline for U.S.-listed Chinese technology companies since the 2008-09 financial crisis has caused.
Last updated on August 3, 2021
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