Alibaba (BABA) Q1 Earnings Preview

Alibaba Group Holding Ltd. (NYSE:BABA) was founded by Jack Ma and his friends in 1999. It initially focused e-commerce market but later stepped into several businesses ranging from food delivery to cloud computing, helping it become one of the world’s most valuable corporations. Its rapid growth and strong global presence enabled it to compete with the likes of leading tech giants, such as Google and Amazon.

The strong e-commerce sales helped Alibaba deliver another impressive quarter. The company recently announced earnings of 45.1 billion yuan, or 16.38 yuan per share for its first quarter ended June 30, compared to 47.6 billion yuan, or 17.36 yuan per share in the year-ago quarter. On an adjusted basis, the Chinese e-commerce giant earned 16.60 yuan per share, ahead of the consensus forecast of 14.33 yuan per share.

Revenue for the quarter jumped 34 percent on a year-over-year basis to 205.7 billion yuan but missed analysts’ average estimate of 209.1 billion yuan. Alibaba’s flagship e-commerce business thrived in the quarter, generating a revenue of 180.2 billion yuan, representing a year-over-year surge of 35 percent. In comparison, cloud computing revenue advanced 29 percent to 16.1 billion yuan.

Commenting on the quarter, CEO Daniel Zhang said, “Alibaba started the new fiscal year by delivering a healthy quarter. For 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. Over more than twenty years of growth, we have developed a company that spans across both consumer and industrial Internet, with multiple engines driving our long-term growth. We believe in the growth of the Chinese economy and long-term value creation of Alibaba, and we will continue to strengthen our technology advantage in improving the consumer experience and helping our enterprise customers to accomplish successful digital transformations.”

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