Alibaba posts strong results as shopping, cloud units grow

Alibaba posts strong results as shopping, cloud units grow

Alibaba, the Chinese e-commerce company, reported better-than-expected third-quarter results, as revenue soared at its shopping sites, cloud computing unit and its video streaming services. Wall Street was looking for adjusted earnings of 69 cents a share on revenue of $5 billion. The company reported revenues of $5.14 billion on diluted non-GAAP earnings of $0.79.

The results also beat analyst estimates and defied uncertainties about the health of China's slowing economy.

Alibaba Group Holding Limited (BABA) reported a profit for the second quarter ended September 30, 2016 that declined 66 percent from previous year.

Singles Day, held every year on 11 November, is also referred to as Double Eleven because of its date.

Net profit fell 69% to 7 billion yuan, but analysts did not seem too anxious as the decline was due mainly to last year's one-time gain from a revaluation of stocks in Alibaba Health Information Technology. Moreover, Alibaba's fledgling cloud computing business more than doubled sales and nearly broke even, a significant feat for a capital-intensive business.

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Shares rose more than three per cent before the stock markets opened in NY on Wednesday.

Revenue from core commerce increased 41% year-over-year to RMB 28.49 billion or $4.273 billion. Alibaba Pictures last month took a minority shareholding in Spielberg's Amblin Partners, a film creation company that includes DreamWorks studios. Our highly profitable and cash flow generative core commerce business enables us to invest in our future growth areas of cloud computing, digital media and entertainment and innovation initiatives. Cloud revenue growth is expected to continue to grow.

On Thursday, Alibaba said the investigation would not interfere with its performance on Singles' Day. Sales from the digital media and entertainment division quadrupled to 3.6 billion yuan.

Alibaba Group Executive Vice Chairman Joe Tsai, in a conference call with analysts, said there's still "tremendous opportunity" to boost monetization of the company's user base.

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