Alibaba posts surprise loss from stock markdowns even as third-quarter sales, operating profit rise
- Alibaba’s operating profit rose by a better-than-expected 68 per cent, underscoring how cost cuts resulted in leaner operations across all its business units
- The company approved a US$15 billion share buyback plan, adding to the US$25 billion programme through 2025
The company, which owns the South China Morning Post, reported an unexpected net loss of 20.6 billion yuan (US$2.88 billion) under global accounting standards, as it marked down the value of its equity investments. It was worse than the 18.8 billion yuan profit forecast by analysts surveyed by Bloomberg. Sales grew 3 per cent to 207.2 billion yuan, slower than the 209.2 billion yuan expected in the poll.
Under Chinese accounting standards, Hangzhou-based Alibaba posted an adjusted net income of 33.8 billion yuan, representing a 19 per cent growth from a year earlier.
“We delivered a solid quarter in a macro environment full of uncertainty,” said Daniel Zhang Yong, CEO and chairman of Alibaba. “The ongoing resurgence of Covid-19, geopolitical tension, inflation and currency depreciation – the convergence of all these forces has created considerable difficulties for business operations.”
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Alibaba’s operating profit rose by a better-than-expected 68 per cent, underscoring how the company’s cost cuts shaved total costs and expenses by 2 per cent, resulting in leaner operations across all its business units, including cloud computing and food delivery.