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Wall Street welcomes Alibaba results

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AFP New York
Last Updated : Nov 04 2014 | 11:55 PM IST
Chinese online commerce giant Alibaba met Wall Street expectations today in its first quarterly report after completing the world's biggest stock offering, propelling its stock to record territory.
Alibaba said its adjusted third quarter net profit rose by 15 per cent to USD 1.1 billion. But using standard accounting practices that include depreciation and one-time costs, profits fell 39 per cent to USD 494 million.
Revenue jumped 53.7 per cent from the same quarter last year to USD 2.7 billion.
"We delivered a strong quarter with significant growth across our key operating metrics," Alibaba Group chief executive Jonathan Lu said in a statement.
Shares in Alibaba jumped to new record highs, adding 2.2 per cent to USD 104 after the news.
Alibaba operates China's most popular online shopping platform, Taobao, which is estimated to hold more than 90 per cent of the country's online market for consumer-to-consumer transactions.

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As it does not sell products directly, but acts as an electronic middleman, Alibaba has been able to generate enviable profit margins.
The company also seems to be managing well the transition to mobile devices.
It pointed to a staggering 1,000 per cent rise in revenue generated from people accessing its services via mobile devices, to USD 606 million.
Mobile now accounts for 35.8 per cent of sales by one measure, up from 32.8 per cent in the previous quarter and 14.7 percent one year ago.
"We extended our unrivaled leadership in mobile with 217 million monthly active users on our mobile commerce apps in September," said Lu.
That represented a 15.4 per cent gain from the previous quarter and a 139 per cent jump from one year ago.
Chinese operations accounted for four-fifths of revenue, although its international businesses continued to expand strongly.
Despite the results, some analysts expressed concern about a jump in expenses
Adjusted earnings per share, the benchmark used in the US since its USD 25 billion stock offer, came in at 45 cents, a 9.4 per cent increase in line with analyst expectations.

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First Published: Nov 04 2014 | 11:55 PM IST

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