Alibaba Investors in More Pain After Mixed Quarterly Results

Alibaba Group Holding Ltd. (NYSE: BABA) released its fiscal second-quarter financial results before the markets opened on Thursday. This company took a hit earlier this week when Ant Financial’s IPO was shelved.

The Chinese tech and e-commerce giant said that it had $2.65 in earnings per share (EPS) and $22.84 billion in revenue, which compares with consensus estimates of $2.11 in EPS and revenue of $23.17 billion. The same period of last year reportedly had EPS of $1.85 and $14.97 billion in revenue.

Annual active consumers on the China retail marketplaces reached 757 million, an increase of 15 million from the trailing 12-month period ended in June. Mobile monthly active users on the China marketplace reached 881 million in September, an increase of 7 million over June 2020.

Revenue from the China commerce retail business increased 26% year over year to $14.06 billion, and the revenue from the China wholesale business increased by 11% to $536 million. International commerce retail revenues increased 30% to $1.15 billion and at the wholesale increased by 44% to $517 million.

As for the cloud computing business, revenues increased 60% year over year to $2.19 billion, primarily driven by growth in revenues from customers in the internet, finance and retail industries.

Digital media and entertainment revenue grew 8% year over year to $1.19 billion. The increase was primarily due to the increase in revenue from online games, partly offset by the decrease in revenue from customer management.

On the books, Alibaba cash, cash equivalents and short-term investments were $59.78 billion at the end of the quarter, up from $56.20 billion at the end of the June 2020 quarter. The increase in cash, cash equivalents and short-term investments during the quarter was due primarily to free cash flow generated from operations of $5.97 billion, partially offset by cash used in investment and acquisition activities.

Alibaba stock traded down over 3% early Thursday to $285.01, in a 52-week range of $169.95 to $319.32. The consensus price target is $335.89.