Alibaba Shows Strength

Alibaba released its first earnings report as a listed company on Tuesday and showed the strong business growth that many have been hoping for. But earnings for the quarter ended in September fell 39% from a year earlier to $494 million. This was caused by a large stock award given to employees and executives before Alibaba’s IPO in September, in an attempt to hold on to staff. Besides the one time expense, revenue for the quarter rose 54% to $2.74 billion, as the company generated more business through online shopping sites.

Having more users than ever before, Alibaba said that more people were shopping through their smartphones, which increased earnings from mobile services. In the past quarter, the company added about 29 million mobile users. However, increased expenses from getting and serving those mobile users in addition to the stock award pushed Alibaba’s profit margins to 25.8% for the quarter, down from 47.9% a year ago.

Even with these numbers, opinions on the company are spread. Some are disappointed that Alibaba did not provide an earnings outlook. Others feel that Alibaba had great results since more people are buying more. Shares have risen 56% since the IPO and Alibaba’s market value now exceeds that of Wal-Mart.

Alibaba’s online sites Taobao and Tmall marketplaces did a combined $90.5 billion in business in the latest quarter, up 49% from a year earlier. The company is adapting to a mobile commerce environment. Alibaba will continue to work on their own smartphone operating system in an attempt to stay ahead of their competition. They earned 45 cents a share for the September quarter, in line with estimates. Revenue exceeded estimates of $2.61 billion.

http://online.wsj.com/articles/alibaba-revenue-rises-54-1415103172?

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