Alibaba Q2 2023 earnings for September quarter

Signage at the Alibaba Group Holding Ltd. booth at the Smart China Expo in Chongqing, China, on Monday, Sept. 4, 2023.

Qilai Shen | Bloomberg | Getty Images

Chinese e-commerce giant Alibaba on Thursday reported quarterly profit that missed market expectations and said it would not proceed with the full spin-off of its cloud group.

Its U.S. shares fell over 5% in pre-market trading following the news.

Here’s how Alibaba did in the September quarter, compared with Refinitiv consensus estimates:

  • Net income attributable to ordinary shareholders: 27.7 billion yuan ($3.8 billion) versus 29.7 billion yuan expected.
  • Revenue: 224.79 billion yuan ($31 billion) versus 224.3 billion yuan expected.

In its earnings release Thursday, Alibaba said that it would no longer proceed with a spin-off of its Cloud Intelligence Group — the cloud computing arm of Alibaba that competes with Amazon Web Services and Microsoft Azure. Alibaba had planned to list the division publicly.

Alibaba said that it had curbed the spin-off due to U.S. chip exports, which have made it harder for Chinese firms to get critical chip supplies from U.S. companies. The U.S. barred sales of Nvidia’s advanced artificial intelligence-focused H800 and A800 chips in October.

On Thursday, Alibaba said that the U.S. chip restrictions have “created uncertainties for the prospects of Cloud Intelligence Group.”

“We believe that a full spin-off of Cloud Intelligence Group may not achieve the intended effect of shareholder value enhancement,” the company said, adding that it would instead focus on developing a sustainable growth model for the unit Cloud Intelligence Group “under the fluid circumstances.”

The Thursday results mark the first set of Alibaba earnings since veteran executive Eddie Wu succeeded former boss Daniel Zhang as CEO. As part of a broader management reshuffle, the company’s co-founder Joe Tsai also took over as chairman, Alibaba said in June.

Investors will be watching for key signs of the company’s progress following the reorganization of Alibaba into six individual business units — one of the most radical shake-ups in the company’s history. Alibaba is seeking initial public offerings for its cloud computing division and logistics division Cainiao.

The results also serve as an indication of the health of the Chinese consumer. Economists were expecting a boom in China’s economy following its emergence from Covid-19 lockdowns last year, but the rebound has proven more tepid, with a property crisis and other structural challenges posing risks to the country’s recovery.

This is a developing story and will be updated shortly.

Source link

Share with your friends!

Products You May Like

Leave a Reply

Your email address will not be published. Required fields are marked *

Get The Best Financial Tips
Straight to your inbox

Subscribe to our mailing list and get interesting stuff and updates to your email inbox.