Alibaba’s earnings performs lower than expected

Alibaba’s earnings performs lower than expected 1

Alibaba Group Holding Ltd (NYSE:BABA) stock goes down despite the company’s earnings beat. The third quarter earnings of the fiscal year FY14 were released during the pre-market hours on Thursday.

Despite the company bagging gigantic sum of revenues around $4.22 billion in FY14Q4, investors were disappointed with how the results came out for the China’s e-commerce giant. The stock was 7% down during the pre-market hours.

Interested clients were expecting higher monetization rates, than the reported non-GAAP net income of $2.1 billion, or $0.81 earnings per share. BABA earnings gained a 40% high on the quarter-over quarter, but were lower than the expected $4.44 billion revenue projection by The Wall Street analysts. However, was higher than the expected $0.75 EPS.

Alibaba’s sales on Singles Day which were nearly double of previous year, crossed over $9 billion.

According to the BABA stock news, the record-breaking $25 billion IPO company started its US stock trading at NYSE at $92.7 in September, which had an all-time high stock price of $120 per share, only was able to touch $100 on Wednesday before the earnings release.

Jack Ma Yun, the company’s founder and CEO expects his company to grow further in every horizon. This is nothing new that the Chinese mammoth controls more ecommerce than America’s Amazon and eBay combined does.

The gross merchandising value or GMV for the last quarter of the company rose to $127 billion, around 49%. The merchandise transaction through mobile rose to 42% from 36% from previous quarter.

Alibaba’s earnings performs lower than expected 2

The GMV monetization however went low in the December quarter for the company as more people switched to carrying out transactions from mobile resulting in lower monetization rate as compared to the transactions carried out from PCs. The mobile monetization rate for the company however, increased to 1.96% from 1.87% in the last quarter of the fiscal year.

Despite the facts, Alibaba’s online active customers on various services raised to 334 million from 307 million in third quarter of the year.

With this analysis, BABA stock price today is lower than what was expected from the promising company. Yahoo! Inc too stated on Tuesday that the online company seeks to spinoff the remaining of BAAB’s stake.

The company’s last quarter results, despite being impressive, came across as a disappointment for the investors in terms of key metrics that is company’s revenue and monetization rates.

At the closing bell on Wednesday, Alibaba’s shares were down 4.36% to $98.45.

 

 

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