Alibaba (BABA) pops on earnings beat, results seen as 'solid'

Alibaba (NYSE: BABA) reported better-than-expected results for its fourth quarter to send its shares nearly 4% higher in pre-market Thursday.

The China-based e-commerce titan reported adjusted earnings per American depositary receipts of 19.26 yuan, beating the consensus of 16.63 yuan. Revenue for the quarter rose 2.1% to 247.76 billion yuan, again better than the consensus of 245.87B yuan.

“We delivered a solid quarter despite softer demand, supply chain and logistics disruptions due to impact of changes in COVID-19 measures,” said Daniel Zhang, Chairman and Chief Executive Officer of Alibaba Group.

Zhang added that he expects to witness “continued recovery in consumer sentiment and economic activity.”

Cloud sales increased by 3.3% to 20.18B yuan, worse than the average analyst estimate of 21.34B yuan. Investors were impressed to see that the adjusted Ebitda margin increased by 300 basis points to 24% from a year-ago period, while analysts were expecting 21.9%. Along these lines, Alibaba reported over 4,000 fewer employees at the end of the December quarter compared to FQ3.

"During the past quarter, we continued to improve operating efficiency and cost optimization that resulted in robust profit growth," said Toby Xu, Chief Financial Officer of Alibaba Group.

Alibaba also said it spent $3.3B on stock buybacks in the quarter.

Vital Knowledge analyst Adam Crisafulli said Baba’s results were “solid.”

“Revenue upside was driven by the core China Commerce business along with Int’l Commerce and Cainiao Logistics while Local Consumer Services and Cloud Computing fell a bit short,” Crisafulli wrote in a flash note.

By Senad Karaahmetovic

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