Shares of Alibaba rose 3.4 per cent to $183.89 at 9:39 am in New York as investors cheered the result, plus more than $3 billion in new funding for its newly acquired food delivery arm as it does battle with Meituan Dianping.
Revenue at China’s biggest e-commerce company climbed 61 per cent to 80.9 billion yuan ($11.8 billion) in the three months ended June, matching the average estimate. Alibaba’s mounting spending, such as on acquisitions and expanding its Hema supermarket chain, is hurting margins though. Adjusted earnings per share of 8.04 yuan fell short of the 8.19 yuan estimate.
Net income slid 41 per cent to 8.7 billion yuan, though that’s after taking into account an increase in the valuation of affiliate Ant Financial, which boosted the expense of shares awarded to employees. That topped the 7.6 billion yuan projected.
“We remain confident on the company's revenue growth given its diversified product offerings," Mae Huang, an analyst at SWS Research, said in a report.