Alibaba Stock Tumbles After Softer Growth Forecast
China’s e-commerce giant Alibaba Group Holding Ltd. slashed its full-year revenue forecast Thursday while posting weaker-than-expected September quarter results, reflecting slowing economic growth and regulatory headwinds.
The company reduced its guidance for revenue growth in the current fiscal year to between 20% and 23% year-on-year, citing “macroeconomic conditions and the competitive landscape.” It previously forecast annual revenue growth of 29.5%.
Alibaba’s American depositary shares closed down 11% Thursday at $143.6 apiece.
Alibaba reported fiscal second-quarter net income of 5.4 billion yuan ($833 million), down from 28.8 billion yuan a year earlier. Earnings per share fell 38% from a year ago and missed analysts’ estimates. Revenue for the September quarter rose 29% year-on-year to 200.7 billion yuan, also falling short of expectations.
Alibaba cited general economic fluctuations, the impact of the Covid-19 pandemic, changes in laws, regulations and the regulatory environment among factors that affected operations.
Along with rivals such as Tencent Holdings and Meituan, Alibaba and China’s major tech companies are under closer regulatory scrutiny amid the government’s year-long crackdown on anti-competition practices, which led to a record $2.8 billion fine against Alibaba earlier this year.
Revenue from the core commerce segment totaled 171.2 billion yuan in the September quarter, an increase of 31% from the same period last year and contributing 85% of total revenues, Alibaba said. Cloud computing revenue rose 33% to 20 million yuan, representing 10% of total revenue.
"Alibaba continued to firmly invest into our three strategic pillars of domestic consumption, globalization and cloud computing to establish solid foundations for our long-term goal of sustainable growth in the future," Alibaba Chairman and CEO Daniel Zhang said in a statement.
Annual active consumers of Alibaba’s ecosystem around the world reached 1.24 billion for the 12 months ended Sept. 30, an increase of 62 million from the 12 months ended June 30.
Contact reporter Han Wei (email@example.com) and editor Bob Simison (firstname.lastname@example.org)
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