Shares of Alibaba Group Holding Ltd. (NYSE: BABA) climbed in premarket trade Thursday after it reported better than expected first quarter revenue numbers that beat Wall Street analyst expectations.
For the quarter ended June 2018, Alibaba, which is China’s second-largest company reported earnings of 3.30 yuan (US$0.48), versus 2.79 yuan (US$0.41) due to one-off costs related to share-based compensation for group company Ant Financials' recent fundraising. Revenue shot up 80.92bn yuan (US$12.23bn) versus analyst expectations of 80.75bn yuan (US$11.74bn). This was a 61% rise from the 50.18bn yuan (US$7.30bn) reported in the same period last year.
US-listed shares of Alibaba surged 2.9% to US$183 in the premarket.
Alibaba is now expanding at a mind-boggling pace on international expansion and new businesses from cloud computing to supermarkets.
“Alibaba had another excellent quarter, with significant user expansion and even more robust engagement across our growing ecosystem. Our China retail marketplace business continues to gain share, with new retail initiatives driving revenue growth and enabling our retail partners to seamlessly serve customers. We are executing our plan of providing more choice to users along the consumption continuum, with digital entertainment and local service offerings that tap into big addressable markets beyond core commerce,” said Alibaba Group CEO Daniel Zhang.
“We will continue to invest in strategic business opportunities and innovation to sustain our competitive advantage and for long-term growth,” he added.
Revenue growth has skyrocketed since Alibaba's 2014 listing on the New York Stock Exchange. However, “aggressive investment in offline retail, logistics and cloud computing has shrunk its profit margin to an all-time low,” reported Reuters.
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