News

Alibaba Shares Tumble After Lowering its Aspirations

Alibaba shares plunge 8% after reducing its guidance and declining profits due to the slowdown in the Chinese economy

Alibaba failed to reach analysts’ estimates of revenue and profit in the September quarter as slowing Chinese economic growth weighed on its results and regulatory difficulties faced by the company.

Alibaba collected revenues of 200.69 billion yuan (31.4 billion dollars) during the second fiscal quarter, recording a growth of 29% year on year, but it came below analysts’ expectations of 204.93 billion yuan, the e-commerce company’s earnings per share fell 38% year on year to 11.2 yuan, compared to expectations of 12.36 yuan, knowing that expectations were low during this quarter, considering analysts as one of the most difficult periods for the e-commerce giant, which pushed its US-listed shares to fall by 8.2% in premarket trading.

The Chinese company has also lowered its revenue guidance for the current fiscal year, as it previously expected to raise 930 billion yuan, which would have represented a growth of 29.5% year-on-year, while it now sees growth to be between 20-23% only.

The Chinese economy slowed down during the third quarter of the year, dealing a severe blow to consumption, and Alibaba suffered from the Chinese government’s scrutiny campaigns on its commercial technologies in its local market, as it faced several regulatory tightening, from anti-monopoly to data security, Read more [China Keeps Scrutinize The Technology and Internet Sector] The Chinese company was reportedly fined about $2.8 billion in April as part of an antitrust investigation. Read more [China Fines Alibaba $2.75B for Violating Antitrust Laws].

The results report comes after Singles’ Day, a giant shopping event in China in which e-commerce companies offer huge rebates to raise billions of dollars in sales, witnessed by rival e-commerce company JD.com. Read more [JD.com Website Posts Record Sales on Singles Day].

Related Articles

Back to top button