NEW YORK (AFP) – Alibaba shares plunged Thursday as the Chinese e-commerce giant’s quarterly report showed weaker-than-expected sales growth.
Alibaba shares closed down 8.8 per cent at $89.77.
The online shopping platform posted a 40-per-cent jump in sales to $4.219 billion, but that missed the $4.45 billion in revenues that analysts were expecting.
Net profit for the three months ending December plunged 28 per cent to $964 million, while earnings per share rose 13 per cent to 81 cents.
“Alibaba performed very well this quarter, with revenue growing 40 per cent year on year,” chief financial officer Maggie Wu said in a statement.
“We continue to execute our focused growth strategy, and the fundamental strength of our business gives us the confidence to invest in new initiatives to add new users, improve engagement and customer experience, expand our products and services and drive long-term shareholder value.”
But investors and analysts gave a less enthusiastic response.
Analyst Youssef Squali at Cantor Fitzgerald called the results “mixed” and added, “While we expect Alibaba to continue to dominate the rapidly growing Chinese e-commerce market for years to come, we believe that near-term predictability of growth and margins has deteriorated given the company’s continued transition to mobile and changes to its user experience.”
China makes up by far its biggest market with sales of $3.429 billion, as Alibaba operates the country’s most popular online shopping platform Taobao.