Tags: alibaba | profit | earnings | shoppers

Alibaba Profit Beats Estimates as More Shoppers Lure Advertisers

Tuesday, 04 Nov 2014 07:39 AM

Alibaba Group Holding Ltd. posted earnings that beat analysts’ estimates in its first earnings report as a public company, with increased shopping traffic in China generating more spending by advertisers.

Adjusted earnings per share for the second quarter were 2.79 yuan (46 U.S. cents), the Hangzhou, China-based company said today in a statement. Analysts predicted 2.74 yuan, the average of estimates compiled by Bloomberg. Net income fell to 3.03 billion yuan in the three months ended September.

Alibaba, with 279 million active buyers as of June, is luring more vendors to platforms Taobao Marketplace and Tmall.com by providing advertising tools and cloud-computing services that analyze user preferences. The company is ramping up preparations for a Nov. 11 sales event, its busiest shopping day of the year, and seeking content partners in Hollywood to compete with Tencent Holdings Ltd. for the 527 million Chinese who access the Internet from mobile devices.

“The company posted fast growth in transaction volume,” You Na, an analyst at ICBC International Research Ltd. in Hong Kong, said before the earnings. “Expectations for Nov. 11 sales this year are quite upbeat as well.”

Chairman Jack Ma last month said Alibaba may cooperate with Apple Inc. for mobile payment services as he seeks partners in Hollywood to add television and movie content.

Alibaba’s revenue advanced to 16.8 billion yuan, compared with the 16 billion-yuan average of 26 estimates.

China has 632 million Internet users, more than the population of any other country except India.

Movies, TV

The American depositary receipts of Alibaba rose 3.3 percent to $101.80 at the close in New York. The shares have gained 50 percent since Alibaba sold stock at $68 apiece in the IPO, which raised a record $25 billion.

Ma visited Hollywood in October to learn about movie studios, saying China’s film industry needed great cultural products. Alibaba offers entertainment content including high- definition movies and TV shows through its set-top boxes and online video site Youku Tudou Inc., in which Alibaba has a minority stake.

China will be the world’s largest movie market as the nation’s middle class expands to 200 million people, Ma said.

New Markets

Ma is expanding into new businesses and targeting markets outside his home country.

AliExpress, the company’s market for customers outside China, was founded in April 2010 and is already the top shopping site in Russia and Brazil, markets where it currently has no employees. The company is looking for deals that can help it expand in Africa, Southeast Asia, Europe and the U.S.

Zhejiang Ant Small & Micro Financial Services Group Co., the payment-processing affiliate that includes Alipay, is expanding in the U.S. and Russia.

Alipay has 17.9 million active users overseas in more than 100 countries and is accepted by 2,000 merchants, Sabrina Peng, vice president for Alibaba’s finance arm’s international business, said in October.

In September, the finance business won approval to jointly set up a bank in China as it expands financial services operations.


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Alibaba Group Holding Ltd. posted earnings that beat analysts' estimates in its first earnings report as a public company, with increased shopping traffic in China generating more spending by advertisers.Adjusted earnings per share for the second quarter were 2.79 yuan (46...
alibaba, profit, earnings, shoppers
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2014-39-04
Tuesday, 04 Nov 2014 07:39 AM
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