Investors looking forward to optimistic earnings from U.S-listed Chinese companies have mostly been disappointed so far. Their disappointment grew in Alibaba‘s earnings report today — the Chinese tech giant posted one of its worst days in history, sinking to multi-year lows after missing on both top and bottom lines. 👎
The company posted revenue of ¥200.69 billion ($31.4 billion), which was up 29% YoY, but still short of the ¥204.93 billion estimate. To make matters worse, the company’s net income plummeted 81% in the quarter to ¥5.4 billion; Alibaba posted earnings per share of ¥11.20, a 38% YoY decline. It was also well below analyst estimates.
But that’s not even the worst part: Alibaba slashed its outlook for FY 2022, faulting competition and weaker consumer spending. 😬 That’s understandable, given that the company has now missed analyst estimates for two quarters. However, analysts were hopeful that Alibaba’s customer growth (and the perceived conclusion to China’s crackdown on big tech) could make up for the difference this quarter. It didn’t.
Alibaba’s hottest business segment was its cloud computing unit, which grew 33% YoY. Its commerce biz, made up of several segments, appreciated 31% growth YoY.
Alibaba’s full-year growth is only expected to be 20-23%. The company indicated that it will elaborate on its outlook during an “annual investor forum starting Dec. 16.”
$BABA lost 11.1% today. You can read September’s quarter results here.