Alibaba Swings to a Loss as Revenue Beats Forecasts

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Revenue from Alibaba’s core commerce segment rose 72% from a year earlier.

Greg Baker/AFP via Getty Images

Alibaba Group Holding

reported a surprise net loss during its fiscal fourth quarter—the result of a fine levied by Chinese regulators amid a crackdown on big technology companies.

The company (ticker: BABA) said it lost 5.48 billion yuan (US$836 million), while the consensus call among Wall Street analysts was that net income would total 7.78 billion yuan, according to FactSet. It also reported its first loss from operations since going public, at 7.66 billion yuan.

The red ink stemmed from a fine of 18.23 billion yuan, imposed in April, over allegations that the company had abused its dominant market position. Companies like

Tencent Holdings

(700. Hong Kong) and Baidu (BIDU) have also faced heightened scrutiny and fines.

Alibaba’s adjusted earnings of 10.32 yuan per share fell short of estimates at 11.16 yuan, according to FactSet. Total revenue of 187.4 billion yuan was up 64%, beating the consensus call for 180.4 billion yuan.

Daniel Zhang
said in the earnings release that the company hit one billion annual active consumers globally during the 2021 fiscal year.

“We remain very excited about the growth of China’s consumption economy, which is benefiting from the acceleration of digitalization in all aspects of life andwork,” Zhang said. “We will continue to focus on customer experience and value creation through innovation, as we pursue our mission to make it easy to do business anywhere in the digital era.”

For the total core commerce segment, revenue hit 161.37 billion yuan during the quarter, up 72% year over year. Sales in the cloud-computing business jumped 37% year over year to 16.76 billion yuan. Digital media and entertainment sales were up 12% to 8.05 billion yuan, while the catchall segment for innovation initiatives and other operations saw 18% growth to 1.22 billion yuan.

For the 2022 fiscal year, Alibaba forecasts sales of more than 930 billion yuan. Citi Research analyst Alicia Yap sees that as a positive sign, a suggestion that the company’s overall growth prospects “remain intact across all business segments.”

Alibaba’s American depositary shares were down 5.1% to $208.61 in Thursday morning trading. The S&P 500 index was up 1.2%.

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