Wall Street welcomes Alibaba results
New York (AFP) - Chinese online commerce giant Alibaba met Wall Street expectations Tuesday in its first quarterly report after completing the world's biggest stock offering, propelling its stock to record territory.
Alibaba said its adjusted third quarter net profit rose by 15 percent to $1.1 billion. But using standard accounting practices that include depreciation and one-time costs, profits fell 39 percent to $494 million.
Revenue jumped 53.7 percent from the same quarter last year to $2.7 billion.
"We delivered a strong quarter with significant growth across our key operating metrics,? Alibaba Group chief executive Jonathan Lu said in a statement.
Shares in Alibaba jumped to new record highs, adding 2.2 percent to $104 after the news.
Alibaba operates China's most popular online shopping platform, Taobao, which is estimated to hold more than 90 percent of the country's online market for consumer-to-consumer transactions.
As it does not sell products directly, but acts as an electronic middleman, Alibaba has been able to generate enviable profit margins.
The company also seems to be managing well the transition to mobile devices.
It pointed to a staggering 1,000 percent rise in revenue generated from people accessing its services via mobile devices, to $606 million.
Mobile now accounts for 35.8 percent of sales by one measure, up from 32.8 percent in the previous quarter and 14.7 percent one year ago.
"We extended our unrivaled leadership in mobile with 217 million monthly active users on our mobile commerce apps in September," said Lu.
That represented a 15.4 percent gain from the previous quarter and a 139 percent jump from one year ago.
Chinese operations accounted for four-fifths of revenue, although its international businesses continued to expand strongly.
Despite the results, some analysts expressed concern about a jump in expenses
Adjusted earnings per share, the benchmark used in the United States since its $25 billion stock offer, came in at 45 cents, a 9.4 percent increase in line with analyst expectations.
Paul Ausick at the finance blog 24/7 Wall Street said Alibaba appears to be following the strategy of US rival Amazon, favoring growth at the expense of profit margins.
"Investors are probably slightly disappointed in the numbers given the hype and hope surrounding the IPO and the share price growth since then. Some may even be wondering if the company is aiming at being another Amazon.com," he said.
Alibaba said the rise in expenses came from increased stock awards, along with other costs for items including bandwidth and depreciation for its cloud computing platform.
There was considerable concern before Alibaba's September 19 floatation whether there would be sufficient appetite for the IPO to avoid being a flop.
The company's shares have risen from the $68 offering price, putting its market capitalization at roughly $256 billion, above the $246 billion of bricks and mortar retail leader Walmart.
US Internet giant Yahoo, which still holds a large stake in Alibaba despite some divestment, saw its shares increase 0.5 percent to $46.59.
