Alibaba Group (NYSE:BABA) shares dipped in pre-market trading on Wednesday as the firm failed to encourage investors with an expanded share buyback after third-quarter earnings missed expectations.
The Chinese e-commerce giant bumped up its share repurchase programme by US$25 billion to US$35 billion, in a move chief executive Eddie Wu said displayed “confidence in the outlook of [its] business and cash flow”.
But US-listed Alibaba shares slipped over 4%, as the firm posted a 1.5% fall in adjusted earnings per share to 18.97 yuan (US$2.67) for the third quarter ended 31 December 2023.
This was below analysts’ expectations of 19.12 yuan, with revenue coming in as anticipated at 260.3 billion yuan and up 5% year on year.
Free cash flow dropped 31% to 56.54 billion yuan in the quarter.
“The decrease in free cash flow was attributed to increased capex and several one-time factors including timing of income tax payments and working capital changes related to several of our businesses,” the company said in a press release.
For the year so far, income from operations climbed by 16% to 98.5 billion yuan, with 1% growth in Chinese e-commerce revenue in the latest quarter coinciding with a 25% uptick in domestic wholesale income.
According to Alibaba, transaction volume growth remained strong, though the average order value declined.
“We delivered a solid quarter as we are executing our focused strategies across the organization,” Wu added.
“Our top priority is to reignite the growth of our core businesses, e-commerce and cloud computing.”
Shares slipped 4.13% to US$75.