Alibaba also announced that the company will spend up to $6 billion over the next two years to repurchase shares.
China’s top e-commerce company posted net income attributable to shareholders of $1.5 billion (10.65 billion yen) or 60 cents per share. The figure is up from $780 million (5.37 billion yuan) the year prior. The company’s core business unit saw a 47% increase on the quarter, rising to $4.5 billion (31.57 billion yuan).
Alibaba Group Holding Ltd NYSE: BABA Profits Miss Estimates
Chinese consumption remained strong on the quarter, but investors fear that the country’s economy is cooling, which will impact retail sales and growth. Alibaba also expanded into new regions to help alleviate regulations on financial leverage in China.
The March quarter is routinely slow, and Alibaba had to increase expenditures to bring in new sales.
The company is also trying to appeal to middle-class consumers who demand higher-end products, such as Alaskan salmon.
Income tax expenses rose 149% on the quarter, with the company’s effective tax rate increasing from 23% to 29% year-on-year. The company spent $667 million (4.6 billion yuan) on income tax expenses during the quarter.
The company’s cloud computing and digital entertainment businesses are offset by the company’s strong e-commerce segment. The company’s two new segments have soaring costs and have yet to make money, despite soaring revenue.
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