Alibaba shares fall 3% premarket after earnings miss expectations despite cloud computing gains
A sign at the headquarters of Alibaba Group Holding Ltd. in Hangzhou, China, on Friday, Aug. 2, 2024.
Qilai Shen | Bloomberg | Getty Images
Alibaba missed expectations for revenue and net profit in the second quarter of 2024 as the company continued to face difficulties in its core e-commerce business amid increased competition and cautious Chinese consumers.
Alibaba shares fell about 3.49% at 6:58 a.m. in pre-market trading in the U.S.
Here are Alibaba’s Q6 results compared to LSEG estimates:
- Revenue: 243.24 billion Chinese yuan ($34.01 billion) versus the expected 249.05 billion yuan.
- Net income: 24.27 billion yuan versus the expected 26.91 billion yuan.
Revenue rose 4% year-over-year, while net income fell 29% year-over-year. Alibaba said the drop in net income was “mainly due to a decrease in operating income” and “increased impairment” from investments.
Alibaba is looking to restore growth after a tumultuous 2023, when the company made its biggest growth run ever. corporate restructuring. This was followed by senior management changes when Eddie Wu took over as CEO in September.
The e-commerce giant is grappling with cautious Chinese consumers, along with growing competition from rivals like JD.com and owner Temu PDD.
Since taking over, Wu has been trying to stabilize Alibaba’s core e-commerce business in China. The company is currently undergoing a transition period, with plans to focus more on third-party sellers through its platforms — Taobao and Tmall — in China, while reducing its reliance on direct sales.
Wu has previously said the company intends to roll out new monetization features for its e-commerce platforms, helping Taobao and Tmall return to growth in the second half of 2025.
In the second quarter, sales from Taobao and Tmall Group, which represent Alibaba’s e-commerce operations in China, fell 1% year-on-year to 113.37 billion yuan.
Meanwhile, Alibaba’s overseas online shopping businesses, such as Lazada and Aliexpress, continued to be bright spots, with sales in its international e-commerce division up 32% year-on-year.
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