Alibaba misses expectations as earnings plunge 38% in the September quarter

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  • Alibaba has been a victim of China’s crackdown on its domestic technology industry, which has seen new rules brought in ranging from antitrust to data protection.
  • As a result, expectations were lower in the fiscal second quarter earnings report.
  • Analysts expect this to be the most challenging quarter ever for the e-commerce giant.

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GUANGZHOU, CHINA – Alibaba on Thursday missed revenue and earnings expectations for the September quarter, as economic growth in China slowed and the consequences of the country’s crackdown on its technology companies weighed on the consequences.

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Here’s how Alibaba fared in its fiscal second quarter against Refinitiv consensus estimates:

  • Revenue: 200.69 billion yuan ($31.4 billion) versus 204.93 billion yuan estimated, a 29% year-on-year increase.
  • EPS: 11.20 yuan versus 12.36 yuan estimated, a 38% year-on-year decline.

Alibaba has been a victim of China’s crackdown on its domestic technology industry, which has seen new rules brought in ranging from antitrust to data protection.

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While China’s tech giant has gone largely unburdened over the years, Beijing has tried to clean up some of the behavior of its corporates. Alibaba was fined $2.8 billion in April as part of an anti-monopoly investigation.

Meanwhile, China’s economy slowed in the third quarter of the year.

As a result the fiscal second-quarter earnings report fell short of expectations, with analysts expecting it to be one of the most challenging quarters ever for the Chinese e-commerce giant.

The company is kicking off Singles Day, a huge shopping event in China where e-commerce platforms offer huge discounts and generate billions of dollars in sales.

Alibaba grew a total of 540.3 billion yuan ($84.54 billion) in gross trading volume during the 11-day period. Whatever revenue Alibaba gets from this event, it will not be reflected in the September quarter.

This is breaking news. Please check back for more.

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