Alibaba Q2 Profit Tops View; Stock Up

(RTTNews) - Alibaba Group Holding Limited (BABA) reported a profit for the second quarter ended September 30, 2016 that declined 66 percent from last year. The prior year result included a non-cash revaluation gain of RMB 18.60 billion, or RMB 7.26 per share, arising from revaluation of previously held equity interest in Alibaba Health. But Quarterly revenue increased 55% from the previous year.

In the pre-Market trade, BABA is trading at $104.03, up $2.88 or 2.85 percent.

"We reported robust revenue growth of 55% this quarter, with strong growth in each of our four reporting segments. Our highly profitable and cash flow generative core commerce business enables us to invest in our future growth areas of cloud computing, digital media and entertainment and innovation initiatives. We expect each of these businesses to drive long-term value for both our customers and shareholders,"said Maggie Wu, Chief Financial Officer of Alibaba Group.

Net income attributable to ordinary shareholders the second-quarter ended September 30, 2016 was RMB 7.62 billion or $1.14 billion, a decrease of 66% from the prior year's RMB 22.75 billion. The prior year result included a non-cash revaluation gain of RMB18.60 billion arising from revaluation of previously held equity interest in Alibaba Health. Quarterly earnings per share was RMB2.97 pr $0.45, a decrease of 67% compared to RMB8.87 last year.

Excluding the non-cash revaluation gain, share-based compensation and certain other items, non-GAAP net income in the quarter ended September 30, 2016 was RMB12.95 billion or $1.94 billion, an increase of 41% compared to RMB9.20 billion in the same quarter of 2015.

Non-GAAP earnings per grew 46% to RMB5.26 or $0.79 from RMB3.61 in the prior year. Analysts polled by Thomson Reuters expected the company to report earnings of $0.69 per share for the quarter. Analysts' estimates typically exclude special items. Revenue for the quarter was RMB 34.29 billion or $5.14 billion, an increase of 55% from RMB 22.17 billion in the same quarter of 2015. Wall Street expected revenues of $5.03 billion for the quarter. The increase was mainly driven by the continued revenue growth of our China commerce retail business and the consolidation of newly acquired businesses- mainly Youku Tudou and Lazada, which were consolidated for this full quarter.

Revenue from core commerce increased 41% year-over-year to RMB 28.49 billion or $4.273 billion. Revenue from cloud computing increased 130% year-over-year to RMB1.49 billion or $224 million.

Revenue from digital media and entertainment increased 302% year-over-year to RMB 3.61 billion or $541 million.