Alibaba reported results for its December quarter early Thursday that beat estimates on earnings but showed its slowest revenue growth in eight years. BABA stock dipped.
The China e-commerce company reported adjusted earnings of $2.65 a share on revenue of $38.06 billion. Analysts expected Alibaba to report earnings of $2.55 a share on revenue of $38.9 billion. Revenue climbed 10% from the year-ago period, its slowest growth since becoming a public company in 2014.
BABA stock dipped 0.7% to close at 108.93 on the stock market today.
In late November, Alibaba lowered its revenue growth expectations to a growth rate of 20% to 23% for fiscal year 2022. That's down from an earlier forecast issued in May of about 30%. Alibaba blamed more sluggish consumer spending and increasing competition.
China stocks have been hammered this past year in large part due to extensive crackdowns by Chinese government regulators. In addition to Alibaba, stocks hit hard include Baidu and Tencent Holdings. The clampdown that began in late 2020 has hit almost every corner in the industry, causing investors to pull out of China stocks.
Alibaba Stock Does Not Reflect Company Value
BABA stock is down 55% this year.
"Our current share price does not fairly reflect the value of the company," said Chief Financial Officer Toby Xu, on the earnings conference call. "At current price levels, we plan on continuing our share repurchases. At the same time, we will maintain a strong cash position that gives us the financial flexibility for future investments."
During its December quarter, Alibaba repurchased approximately 10.1 million of its American depositary receipts for $1.4 billion.
The company added 43 million active customers during the quarter, reaching 1.28 billion. Revenue from its cloud segment rose 20% to $3.07 billion.
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