Alibaba's stock slumps after another profit miss

By Emily Bary

Company also makes dividend announcement relating to two-part payout

Alibaba Group Holding Ltd. shares were on track to log their third post-earnings decline in as many quarters on Tuesday after the Chinese e-commerce company edged past revenue expectations for its latest quarter but fell short on profit.

The company reported fiscal fourth-quarter net income of 3.3 billion renminbi ($453 million), or 1.30 renminbi per American depositary share, compared with 23.5 million renminbi, or 9.00 renminbi per ADS, in the year-earlier period.

On an adjusted basis, Alibaba (BABA) (HK:9988) earned 10.14 renminbi per ADS, compared with 10.71 renminbi per ADS a year before, while analysts were modeling 10.27 renminbi per ADS. This marked its second miss in a row on quarterly profits.

Shares were down about 7% in Tuesday morning activity.

Revenue rose to 221.9 billion renminbi from 208.2 billion renminbi, whereas the FactSet consensus was 220.3 billion renminbi.

The company logged a 4% rise in sales from Taobao and Tmall Group, reaching 93.2 billion renminbi. Cloud Intelligence revenue increased 3% from the year before to 25.6 billion renminbi.

"During the quarter, our core public cloud offerings, which include products such as elastic compute, database and AI products, recorded double-digit year-over-year growth in revenue," Alibaba said in its release. "Overall revenue excluding Alibaba-consolidated subsidiaries decreased slightly year-over-year as we transition away from low-margin project-based revenues."

Revenue related to artificial intelligence saw a triple-digit bump in growth relative to a year before, the company said on its earnings call.

In terms of the e-commerce business, Chief Executive Eddie Wu called out "tangible results and progress" related to investments that were meant to improve "price competitiveness" and better the shopping experience. Alibaba saw "strong growth in quarterly buyers and purchase frequency," according to Wu.

Alibaba's board of directors has approved a dividend consisting of two parts. This includes an annual cash dividend of $1.00 per ADS and a "one-time extraordinary cash dividend" of 66 cents per ADS. The latter represents "a distribution of proceeds from disposition of certain financial investments," the company said in its release.

The total dividend amount will be roughly $4 billion, per the release.

-Emily Bary

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05-14-24 1152ET

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