China's Alibaba Quarterly Revenue Jumps 54 Percent, Earnings Drop
The e-commerce giant posted its first results since its record IPO and discussed its M&A criteria
Chinese e-commerce giant Alibaba Group on Tuesday reported a higher fiscal second-quarter profit in its first earnings report since its record IPO in September.
The company, led by chairman Jack Ma, reported earnings of $485 million, down 39 percent on higher share-based compensation expense. Excluding certain items, earnings exceeded expectations. Earnings on another basis reported by the company rose 15 percent to $1.11 billion. Revenue jumped 54 percent to $2.74 billion driven by an increase in mobile usage, slightly ahead of Wall Street expectations.
"Our business continues to perform well, and our results reflect both the strength of our ecosystem and the strong foundation we have for sustainable growth," Alibaba CEO Jonathan Lu said.
On a conference call, the company was asked about the company's acquisitions strategy. "We always look at M&A as a long-term strategic thing," said co-founder and executive vice chairman Joe Tsai. "We always like opportunities that will help us add more users and additional engagement...Number two, we are always interested in improving customer experience." And third, he added, "we are always interesting in adding additional product and service categories that will enhance our position in terms of getting consumers' wallet share."
He didn't comment on likely specific deal targets. Ma was just in Hollywood to discuss possible content or other deals with studio executives. There has also been talk that Alibaba could look to acquire a big minority stake in Lionsgate.
Nov. 4, 5:30 a.m. Updated with earnings conference call commentary.
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