Alibaba Stock Drops Pre-Market After Quarterly Revenue Misses Estimates

U.S.-listed shares of Alibaba Group Holding Limited (BABA) dropped 5% in pre-market trading on Thursday after its March quarter revenue fell below Wall Street expectations amid a fierce price battle between China’s e-commerce platforms.

The Chinese e-commerce giant reported quarterly revenue of RMB236.45 billion ($32.81 billion), marking an increase of 7% year-over-year (YoY), but below an analyst estimate of $33.3 billion, as per Koyfin data.

Net income attributable to shareholders came in at RMB12.38 billion ($1.72 billion), marking a jump of 279% YoY, but below estimates of an expected RMB24.7 billion, as cited by CNBC.

The company attributed the rise in net income to the change in the value of equity investments, increase in income from operations, and decrease in impairment of equity method investments, partly offset by losses arising from the disposal of subsidiaries.

The company’s Taobao and Tmall Group divisions saw total revenue rise 9% YoY to RMB101.37 billion, owing to an improvement in take rate. Customer management revenue jumped 12%, while Chinese commercial wholesale revenue in the segment rose 17%.

Revenue from Alibaba International Digital Commerce Group grew 22% YoY to RMB33.58 billion, while Cloud Intelligence Group revenue rose 18% YoY to RMB30.13 billion. The Cloud intelligence group revenue was spurred by strong demand for AI, with AI-related product revenue achieving triple-digit growth for the seventh consecutive quarter.

CEO Eddie Wu said the company would focus on driving AI and Cloud businesses as a new engine for long-term growth.

CFO Toby Xu also said that the company remains confident in its outlook and will continue investing in its core businesses.

BABA stock is up by about 58% this year and has gained 66% over the past 12 months.

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(Exchange Rate: 1 RMB= 0.14 USD)