Alibaba Group Holding Limited (NYSE: BABA) stock fell nearly 6% on Wednesday after the Chinese e-commerce giant reported lower-than-expected earnings for the third quarter.
Alibaba disclosed third-quarter earnings per share (EPS) of 18.97 Chinese yuan ($2.67), with a 5% year-on-year revenue increase to 260.35 billion yuan ($36.6 billion). Both figures fell short of expectations.
The total net income of Alibaba plummeted by 77% due to mark-to-market adjustments on its equity investments and a decline in operational income. These factors were primarily associated with impairment charges incurred by its video streaming service, Youku, and the supermarket chain, Sun Art.
Chinese e-commerce giant saw slowed sales on Taobao, Tmall, and its cloud computing division, with growth rates of just 2% and 3%, respectively.
CEO Eddie Wu noted that moving forward, Alibaba’s primary focus would be “to reignite the growth of our core businesses, e-commerce, and cloud computing.”
CFO Toby Xu revealed that the company plans to boost its share repurchase program by an additional $25 billion, citing a firm belief in the business’s prospects and cash flow. This adjustment brings the total buyback amount to $35.3 billion by the conclusion of 2027.
Alibaba (NYSE: BABA) Stock Reaction
BABA stock plunged 5.87% to close at $73.64 on Wednesday. The traders had exchanged hands with 53,431,622 (53.43 million) shares compared to the average daily trading volume of 22.33 million.
Alibaba Group Holding Limited BABA NYSE: BABA
Salman Akhtar is a finance, stocks, and technology journalist with years of experience across various news organizations. He has contributed his expertise to outlets such as 24NewsHD, TrimFeed, The Voice Pakistan, and TheTechBasic. Salman is passionate about making complex topics accessible to a broad audience. His dedication to delivering accurate and timely information has established him as a trusted voice in the industry. Read Full Bio
