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Earnings Results

May 13, 2021, 7:51 a.m. EDT

Alibaba posts loss due to anti-monopoly fine but beats revenue expectations

By Emily Bary

Alibaba Group Holding Ltd. swung to a loss for its March quarter as the company faced an anti-monopoly fine, but the Chinese e-commerce giant topped revenue expectations for the period amid continued momentum for its online marketplaces.

The company reported a fiscal fourth-quarter net loss of RMB5.5 billion ($836 million), or RMB1.99 per American depositary share, whereas it posted net income of RMB3.2 billion, or RMB1.16 a share, in the year-earlier period. Alibaba’s (NYS:BABA) loss was driven by a RMB18.2 billion ($2.8 billion) anti-monopoly fine .

When excluding the fine and adjusting for expenses, such as stock-based compensation, Alibaba recorded earnings per ADS of RMB10.32, up from RMB9.20 a year earlier, though analysts surveyed by FactSet were expecting RMB11.16 a share.

The stock fell 1.8% in premarket trading Thursday. It has shed 5.5% year to date through Wednesday, while the iShares MSCI China exchange-traded fund (NAS:MCHI) has lost 3.7% and the S&P 500 index (S&P:SPX) has gained 8.2%.

Alibaba’s revenue for the quarter rose to RMB187.4 billion from RMB114.3 billion. The FactSet consensus was for RMB180.2 billion.

Total core commerce revenue rose 72% to RMB161.4 billion, while cloud-computing revenue increased 37% to RMB16.8 billion.

The company had 811 million annual active customers on its China retail marketplaces in the fiscal fourth quarter, an increase of 32 million from the period that ended Dec. 31. Alibaba also had 925 million mobile monthly active users for its China marketplaces in March 2021, up 23 million from December 2020.

“Our app platforms appeal to a growing and increasingly diverse consumer base at various income levels as well as present different purchase use cases for the same consumer,” Alibaba said in its earnings release, and the company is seeing progress with its efforts to expand into lower-tier Chinese cities. About 70% of new annual active customers last fiscal year came from less developed areas.

For the full fiscal year, the company saw gross merchandise volume, or the value of orders made on its marketplaces, of RMB8.2 trillion, a figure that included RMB7.5 trillion in contributions from the company’s China retail marketplaces.

“Given the market potential and our proven profit and cash-flow generation capabilities, we plan to use all of our incremental profits and additional capital in fiscal year 2022 to support our merchants and invest into new businesses and key strategic areas that will help us increase consumer wallet share and penetrate into new addressable markets,” Chief Financial Officer Maggie Wu said in Alibaba’s release.

Link to MarketWatch's Slice.