Alibaba (BABA) posted quarterly earnings Thursday morning that exceeded expectations on both the top and bottom lines, while battling lower demand and supply chain issues. BABA shares rose in early trade, then fell.
On revenue of $35.92 billion, the business posted adjusted profits of $2.79 per share. According to FactSet, analysts projected Alibaba to earn $2.44 per share on $35.8 billion in revenue. Sales increased by 2% over the previous year. Profits increased by 14%.
The figures are for Alibaba’s fiscal third quarter, which concluded on December 31.
BABA shares fell after rising almost 6% in early morning trade. In the stock market today, it closed the day down 0.7%, closing at 94.16..
Prior to the conclusion of China’s zero-Covid policy late last year, a spike in coronavirus infections had already impacted consumption and order fulfillment in the world’s second-largest economy. Alibaba was able to overcome these challenges.
“Going ahead, we anticipate sustained improvement in consumer confidence and economic activity,” said Chief Executive Daniel Zhang in a written statement accompanying Alibaba’s earnings announcement. “We had a successful quarter despite reduced demand, supply chain and logistics challenges caused by changes in Covid-19 measures,” he added.
Zhang stated on the subsequent analyst conference call, “Everything is fast returning to normal. Consumer and corporate confidence are growing in general. Logistics activities have restarted normally, with the complete supply and industrial networks being operational.”
Many of China’s major online companies, including JD.com (JD) and PDD Holdings (PDD) — previously Pinduoduo — fell on Monday. This was in response to reports that JD.com intends to invest $1.5 billion in a subsidiary to compete PDD Holdings. This sparked concerns about rising competitiveness in the future.