Alibaba report disappoints market

Alibaba (BABA) shares fell after reporting sales and profit below analysts' forecasts and lowering its annual sales forecast. In contrast, Alibaba rival JD.com's report beat Wall Street estimates.

Alibaba's (BABA) earnings report for the second quarter of fiscal 2022, which ended Sept. 30 and did not include sales of the year's largest "Bachelor's Day" sale ("11.11"), disappointed the market with lower numbers than Wall Street analysts had forecast.

Alibaba shares, down 30.6 per cent since the start of 2021, fell 9 per cent at the premarket on Thursday after the report was published.

Alibaba's report also came on the back of a more successful report for the same quarter by its smaller-cap competitor JD.com (JD) (Alibaba has a market capitalisation of $442bn, JD.com: $121.8bn). JD.com's report beat analysts' estimates for both revenue and earnings.

JD shares are down 5.4% since the beginning of 2021, but are up 33.7% in the most recent quarter.

Alibaba financial report

Alibaba's total revenues for the fiscal second quarter rose 29% to $31.4bn. (RMB200.69 billion), but came in below Wall Street analysts' average forecast of $32 billion.

Earnings per share were $1.74, below market expectations of $1.86.

Daniel Zhang, chairman and CEO of Alibaba Group, commented on the report, "This quarter, Alibaba continued to invest firmly in our three strategic areas of domestic consumption, globalization and cloud computing to lay a solid foundation for our long-term goal of sustainable growth going forward."

Divisions Revenues in Alibaba's core e-commerce business rose 31% (year-on-year) to ¥171.17 billion, falling short of analysts' expectations.

Revenues from Alibaba's growing cloud division (an industry leader in China) rose 33% to just over ¥20 billion.

Alibaba forecast

The company has also lowered its revenue forecast for the current fiscal year. Previously, Alibaba's annual sales were forecast to grow by 29.5% (year-on-year) to 930 billion yuan, but it is now expected to grow by between 20% and 23%.