Alibaba’s net income contracts sharply to £367 million in the fourth quarter

Alibaba’s net income contracts sharply to £367 million in the fourth quarter
Written by:
Wajeeh Khan
22nd May, 13:08
Updated: 22nd May, 13:12
  • Alibaba’s net income contracts sharply to £367 million in the fourth quarter.
  • The company's gross merchandise volume comes in at to £820 billion.
  • The Chinese technology company reports £13.16 billion in revenue in Q4.

Alibaba Group (NYSE: BABA) was significantly hit by the Coronavirus disruptions at the start of the year. In its earnings report on Friday, however, the company said that it saw early signs of recovery in March. Alibaba attributed a decline in its Q4 net income to the devaluation of its equity investments in several public companies.

CFO Maggie Wu of Alibaba commented on financial results on Friday and said:

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“Although the pandemic negatively impacted most of our domestic core commerce businesses starting in late January, we have seen a steady recovery since March.”

Shares of the company were reported 0.4% up in premarket trading on Friday. At £175 per share, Alibaba is currently about 3% down year to date in the stock market. The benchmark S&P 500 index has lost roughly 8% in 2020 so far.

Alibaba tops analysts’ estimate for revenue in Q4

Alibaba, that is currently filing new patents for real estate and blockchain, posted its net income in the fourth quarter at £367 million that translates to 13 pence of earnings per share. In the same quarter last year, its net income was recorded at a significantly higher £2.97 billion or £1.13 of earnings per share.

On an adjusted basis, the e-commerce giant earned £1.06 per share in the fourth quarter that topped analysts’ estimate of 70 pence per share and came in stronger than 99 pence per share in the comparable quarter of last year.

In terms of revenue, Alibaba reported £13.16 billion versus the year-ago figure of £10.76 billion. According to FactSet, experts had forecast the company to print £12.38 billion in revenue in the fourth quarter.

Alibaba’s gross merchandise volume comes in at £820 billion

On its Chinese retail marketplaces, Alibaba also highlighted an increase in average annual customers to 726 million in the recent quarter. Its gross merchandise volume came in at £820 billion in the financial year that ended in March.

In the new financial year, the company estimates £74.83 billion in revenue versus the experts’ forecast of £75.87 billion.

Alibaba has recovered from a year to date low of £144.84 per share in late March. The company posted an all-time high of £189.30 per share in January 2020. Its performance in 2019 was reported largely upbeat with an annual gain of more than 50%.

At the time of writing, Alibaba has a market cap of £467.50 billion and has a price to earnings ratio of 23.16.

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