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📌 Alibaba Group’s earnings per share for Q1 2024 missed estimates by $0.02 – Tokenist

Alibaba Group Holding Limited (NYSE: BABA), a leading e-commerce and technology conglomerate, announced financial results for the quarter ended March 31, 2024. Mx

– Alibaba Group Holding Limited (NYSE: BABA), a leading e-commerce and technology conglomerate, announced financial results for the quarter ended March 31, 2024.

The company posted moderate growth, with sales up 7% year-on-year to RMB221.874 billion (US$30.729 billion). The growth was driven by the company’s China and international trade business, which saw double-digit year-on-year GMV growth, as well as accelerated growth in cloud computing revenues related to artificial intelligence products.

Despite the increase in revenue, Alibaba’s operating profit fell 3% year-on-year to 14.765 billion yuan ($2.045 billion). Alibaba attributed the drop to increased investment in its e-commerce business and incentives to retain employees at Cainao. Adjusted EBITA also fell 5% to 23.969 billion yuan ($3.32 billion).

Net income attributable to shareholders amounted to ¥3.27 billion (US$453 million), down significantly from the previous year, mainly due to net losses on investments in listed companies.

Alibaba’s results for fiscal 2024 were mixed compared to market expectations. Analysts expected earnings per share (EPS) of ¥10.27 and sales of ¥220.32 billion. Actual sales of ¥221.874 billion were slightly higher than expectations, demonstrating the company’s ability to sustain growth in a fiercely competitive market. However, non-GAAP diluted earnings per share of ¥10.14 ($1.40) came in below expectations.

This divergence in earnings was mainly due to the company’s increased investments and significant net losses on equity investments, which impacted the bottom line.

Reflecting the volatility in Alibaba’s investment portfolio, quarterly net income fell 96% year-on-year to RMB 919 million (US$127 million). This sharp drop masked revenue growth, and investors are concerned about the sustainability of the company’s short-term profitability.

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Revenue from Alibaba’s cloud business grew 3% year-on-year in the same quarter. In addition, Alibaba’s board of directors approved a $4 billion dividend for fiscal 2024, reflecting the company’s commitment to returning value to shareholders.

The company also showed confidence in its long-term prospects by carrying out US$12.5 billion in share repurchases during the fiscal year. These measures are likely to strengthen investor sentiment and protect against short-term market volatility.

By business segment, sales of Alibaba’s Taobao and Tmall groups grew 4 percent year-on-year to 93.216 billion yuan (US$12.91 billion). The company achieved double-digit growth in total online sales and orders, driven by an increase in the number of customers and shopping frequency. Cloud Intelligence Group posted revenue of 25.595 billion yuan (US$3.545 billion), with a strategic focus on high-quality revenue from public cloud computing and artificial intelligence products.

Alibaba International Digital Commerce Group’s revenue grew 45% year-on-year to RMB27.448 billion (US$3.802 billion), driven by cross-border e-commerce efforts Cainiao Smart Logistics Network Limited also increased its revenue, mainly from cross-border order fulfillment services. Cainiao Smart Logistics Network Limited also increased its revenue by 30% to ¥24.557 billion (US$3.401 billion), driven by a 30% increase in sales to ¥24.557 billion (US$3.401 billion) from order fulfillment services. These sectors underscore Alibaba’s diversified growth strategy and its drive to improve the operational efficiency of its various divisions.

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