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January 25, 2017

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Alibaba quarterly earnings surprise

ALIBABA Group yesterday reported better-than-expected quarterly earnings after its major business sectors grew robustly as its ecosystem continues to look beyond the core e-commerce operations.

Profit for the three months ended on December 31, which covered the year-end shopping season and Singles Day, soared 38 percent to 17.16 billion yuan (US$2.5 billion) from a year earlier.

Revenue jumped 54 percent to 53.25 billion yuan over the quarter, beating Reuters’ view of 50.1 billion yuan.

“Our robust December quarter demonstrates the strength of the Chinese consumer and Alibaba’s ability to create value across our vast ecosystem,” said Daniel Zhang, CEO of Alibaba.

Its digital media and entertainment-related revenue nearly tripled to 4.06 billion yuan while income from cloud operations more than doubled after four overseas data centers were added last year.

The company revised the annual revenue growth outlook for the 12 months through March 31 to 53 percent from the previous 48 percent.

Alibaba’s sales have been rising at double-digit rates for more than four years.

Its digital entertainment affiliate, which included its wholly owned online video streaming unit Youku Tudou, online mapping services and mobile browsers, has pledged to invest US$7 billion on digital content within three years after consolidating the digital media and entertainment businesses under a single management team in November.

BOCOM International said in a note ahead of the earnings release that Alibaba was expected to further benefit from the rising advertising income, boosted by more efficient and personalized advertising through mobile devices.

Alibaba’s consumer retail site Taobao said its average monthly active users rose 9.6 percent from a year ago to 493 million in December.



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