Alibaba Earnings News: BABA stock disappointed by profit miss
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CLAIM OFFER- Alibaba stock sinks more than 5% in Tuesday's premarket.
- Alibaba posts fiscal Q4 results for quarter ending in March.
- Adjusted EPADS misses consensus by 2 cents, down 12 cents from a year ago.
- Revenue rises 7% YoY as AliExpress, Lazada pull more than their weight.
Alibaba (BABA), maybe China’s most well-known company, posted fiscal fourth-quarter earnings early Tuesday that depressed traders. BABA shares have fallen more than 5% in Tuesday’s premarket after the internet conglomerate and retail powerhouse said it earned $1.40 in adjusted earnings per average depository share (EPADS) for the quarter ending March 31.
That figure missed Wall Street consensus by 2 cents, but revenue of $30.73 billion bested the average forecast by $310 million to rise 7% from a year ago.
The broader US market pulled back slightly in the premarket on Tuesday after the US Producer Price Index for April arrived slightly higher than expected at 0.5% MoM. Economists had settled on a 0.3% forecast prior to the release.
Alibaba earnings news
The fiscal Q4 earnings figure was 12 cents below last year’s bottom line of $1.52 for EPADS, which tells the market that the company founded by Alibaba is not yet out of its three-and-a-half-year rut.
Diluted earnings per non-adjusted US-listed share was $0.18, a stark drop from a year ago, due primarily to the mark-to-market losses experienced by Alibaba’s investments in other companies. The Chinese economy has been depressed for the last few years as US trade barriers and the nation’s real estate crisis take their toll on valuations.
Management chose to focus on the positive side of results of course, which included $12.5 billion worth of share buybacks over the past year, a commitment to continue buybacks, a new $1.00 dividend for the coming fiscal year payable after June 13, and a new $0.66 special dividend.
“Our China and international commerce businesses realized double-digit YoY GMV growth through our focus on the customer experience,” said Alibaba Group CEO Eddie Wu. “We are also excited by the accelerated growth of customers and cloud computing revenues related to our AI products.”
The Taobao and Tmall Group subsidiary, Alibaba’s largest segment, reported revenue increasing by a dismal 4% YoY to $12.9 billion. The Cloud Intelligence Group saw revenue rise just 3% YoY to $3.5 billion.
The Alibaba International Digital Commerce Group subsidiary that includes AliExpress and Lazada is pulling away from the rest of the parent company. Revenue rose 45% from a year ago to $3.8 billion. Combined orders from the various eCommerce platforms rose 20% YoY.
The Cainiao logistics subsidiary also had a successful quarter with revenue up 30% over a year ago to $3.4 billion. Local Services saw an increase of 19% YoY in sales, while sales for the Digital Media & Entertainment Group dropped 1% in the timespan.
AsianStocks FAQs
Asia contributes around 70% of global economic growth and hosts several key stock market indices. Among the region’s developed economies, the Japanese Nikkei – which represents 225 companies on the Tokyo stock exchange – and the South Korean Kospi stand out. China has three important indices: the Hong Kong Hang Seng, the Shanghai Composite and the Shenzhen Composite. As a big emerging economy, Indian equities are also catching the attention of investors, who increasingly invest in companies in the Sensex and Nifty indices.
Asia’s main economies are different, and each has specific sectors to pay attention to. Technology companies dominate in indices in Japan, South Korea, and increasingly, China. Financial services are leading stock markets such as Hong Kong or Singapore, considered key hubs for the sector. Manufacturing is also big in China and Japan, with a strong focus on automobile production or electronics. The growing middle class in countries like China and India is also giving more and more prominence to companies focused on retail and e-commerce.
Many different factors drive Asian stock market indices, but the main factor behind their performance is the aggregate results of the component companies revealed in their quarterly and annual earnings reports. The economic fundamentals of each country, as well as their central bank decisions or their government’s fiscal policies, are also important factors. More broadly, political stability, technological progress or the rule of law can also impact equity markets. The performance of US equity indices is also a factor as, more often than not, Asian markets take the lead from Wall Street stocks overnight. Finally, the broader risk sentiment in markets also plays a role as equities are considered a risky investment compared to other investment options such as fixed-income securities.
Investing in equities is risky by itself, but investing in Asian stocks comes along with region-specific risks to be taken into account. Asian countries have a wide range of political systems, from full democracies to dictatorships, so their political stability, transparency, rule of law or corporate governance requirements may diverge considerably. Geopolitical events such as trade disputes or territorial conflicts can lead to volatility in stock markets, as can natural disasters. Moreover, currency fluctuations can also have an impact on the valuation of Asian stock markets. This is particularly true in export-oriented economies, which tend to suffer from a stronger currency and benefit from a weaker one as their products become cheaper abroad.
Alibaba Stock Forecast
In Tuesday's premarket, BABA stock lost the $80 support level when shares traded down more than 5.5%. If the same carries through to the regular session, this is bad news. The $80 level took BABA investors nearly seven months to regain earlier in May and has worked as occasional support on a number of occasions going back to March of 2022.
If $80 cannot be clung to, then the market will surely send BABA stock back to the $70 level, where BABA has discovered fleeting support in the first four months of this year as well as temporarily in Ocotober 2022.
To move back into a bullish technical pattern, BABA stock must close above last November's range high at $87.83 on the weekly chart. Over the past month, Alibaba's weekly chart shows the Moving Average Convergence Divergence (MACD) rotating back into a bullish crossover, so some hope exists that recent excitement won't dwindle completely.
BABA weekly stock chart
- Alibaba stock sinks more than 5% in Tuesday's premarket.
- Alibaba posts fiscal Q4 results for quarter ending in March.
- Adjusted EPADS misses consensus by 2 cents, down 12 cents from a year ago.
- Revenue rises 7% YoY as AliExpress, Lazada pull more than their weight.
Alibaba (BABA), maybe China’s most well-known company, posted fiscal fourth-quarter earnings early Tuesday that depressed traders. BABA shares have fallen more than 5% in Tuesday’s premarket after the internet conglomerate and retail powerhouse said it earned $1.40 in adjusted earnings per average depository share (EPADS) for the quarter ending March 31.
That figure missed Wall Street consensus by 2 cents, but revenue of $30.73 billion bested the average forecast by $310 million to rise 7% from a year ago.
The broader US market pulled back slightly in the premarket on Tuesday after the US Producer Price Index for April arrived slightly higher than expected at 0.5% MoM. Economists had settled on a 0.3% forecast prior to the release.
Alibaba earnings news
The fiscal Q4 earnings figure was 12 cents below last year’s bottom line of $1.52 for EPADS, which tells the market that the company founded by Alibaba is not yet out of its three-and-a-half-year rut.
Diluted earnings per non-adjusted US-listed share was $0.18, a stark drop from a year ago, due primarily to the mark-to-market losses experienced by Alibaba’s investments in other companies. The Chinese economy has been depressed for the last few years as US trade barriers and the nation’s real estate crisis take their toll on valuations.
Management chose to focus on the positive side of results of course, which included $12.5 billion worth of share buybacks over the past year, a commitment to continue buybacks, a new $1.00 dividend for the coming fiscal year payable after June 13, and a new $0.66 special dividend.
“Our China and international commerce businesses realized double-digit YoY GMV growth through our focus on the customer experience,” said Alibaba Group CEO Eddie Wu. “We are also excited by the accelerated growth of customers and cloud computing revenues related to our AI products.”
The Taobao and Tmall Group subsidiary, Alibaba’s largest segment, reported revenue increasing by a dismal 4% YoY to $12.9 billion. The Cloud Intelligence Group saw revenue rise just 3% YoY to $3.5 billion.
The Alibaba International Digital Commerce Group subsidiary that includes AliExpress and Lazada is pulling away from the rest of the parent company. Revenue rose 45% from a year ago to $3.8 billion. Combined orders from the various eCommerce platforms rose 20% YoY.
The Cainiao logistics subsidiary also had a successful quarter with revenue up 30% over a year ago to $3.4 billion. Local Services saw an increase of 19% YoY in sales, while sales for the Digital Media & Entertainment Group dropped 1% in the timespan.
AsianStocks FAQs
Asia contributes around 70% of global economic growth and hosts several key stock market indices. Among the region’s developed economies, the Japanese Nikkei – which represents 225 companies on the Tokyo stock exchange – and the South Korean Kospi stand out. China has three important indices: the Hong Kong Hang Seng, the Shanghai Composite and the Shenzhen Composite. As a big emerging economy, Indian equities are also catching the attention of investors, who increasingly invest in companies in the Sensex and Nifty indices.
Asia’s main economies are different, and each has specific sectors to pay attention to. Technology companies dominate in indices in Japan, South Korea, and increasingly, China. Financial services are leading stock markets such as Hong Kong or Singapore, considered key hubs for the sector. Manufacturing is also big in China and Japan, with a strong focus on automobile production or electronics. The growing middle class in countries like China and India is also giving more and more prominence to companies focused on retail and e-commerce.
Many different factors drive Asian stock market indices, but the main factor behind their performance is the aggregate results of the component companies revealed in their quarterly and annual earnings reports. The economic fundamentals of each country, as well as their central bank decisions or their government’s fiscal policies, are also important factors. More broadly, political stability, technological progress or the rule of law can also impact equity markets. The performance of US equity indices is also a factor as, more often than not, Asian markets take the lead from Wall Street stocks overnight. Finally, the broader risk sentiment in markets also plays a role as equities are considered a risky investment compared to other investment options such as fixed-income securities.
Investing in equities is risky by itself, but investing in Asian stocks comes along with region-specific risks to be taken into account. Asian countries have a wide range of political systems, from full democracies to dictatorships, so their political stability, transparency, rule of law or corporate governance requirements may diverge considerably. Geopolitical events such as trade disputes or territorial conflicts can lead to volatility in stock markets, as can natural disasters. Moreover, currency fluctuations can also have an impact on the valuation of Asian stock markets. This is particularly true in export-oriented economies, which tend to suffer from a stronger currency and benefit from a weaker one as their products become cheaper abroad.
Alibaba Stock Forecast
In Tuesday's premarket, BABA stock lost the $80 support level when shares traded down more than 5.5%. If the same carries through to the regular session, this is bad news. The $80 level took BABA investors nearly seven months to regain earlier in May and has worked as occasional support on a number of occasions going back to March of 2022.
If $80 cannot be clung to, then the market will surely send BABA stock back to the $70 level, where BABA has discovered fleeting support in the first four months of this year as well as temporarily in Ocotober 2022.
To move back into a bullish technical pattern, BABA stock must close above last November's range high at $87.83 on the weekly chart. Over the past month, Alibaba's weekly chart shows the Moving Average Convergence Divergence (MACD) rotating back into a bullish crossover, so some hope exists that recent excitement won't dwindle completely.
BABA weekly stock chart
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