Alibaba Group Holding Ltd (NYSE:BABA) Reported Strong Numbers – Revenues Up By 53.7 Percent

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By Lisa Bradley on November 4, 2014 Company

Alibaba Group Holding Ltd (NYSE:BABA) released its quarterly reports today, November 4, 2014. The net income figures were up by 15.5 percent and reached to a lump sum of $1.11 billion for the most recent of its quarters, July to September.

The company posted its quarterly figures for the very first time after its first round of offerings that took place in the month of September 2013. The phase set a record of $25 billion in IPOs.

Several analysts and researchers covered the stocks of the company. According to Thomson Reuters estimates, the net income (non GAAP) of the company was predicted to reach around $1.17 billion. It is important to note here that the consensus estimate was made by 17 of the firm’s analysts. Non GAAP income estimate excluded the amortization and depreciation values of intangible assets. It also excluded the compensation costs that were made in lieu of company’s shares.

The company was expecting its revenues to reach $2.7 billion. However, the figures of Alibaba Group Holding Ltd (NYSE:BABA) increased by 53.7 percent and reached to $2.74 billion. This is the fastest growth rate that the company has experienced in the history of its 3 fiscal quarters.

As far as the Diluted EPS (earnings per share) of the company is concerned, the figures are recorded to be at $0.20. The non-GAAP diluted earnings were a little high, $0.45 to be more precise. The figures have seen an increase of 9.4 percent on yearly basis.

The chief executive officer of the company, Jonathan Lu, during the earnings call stated that the company has delivered a very strong performance with huge growth margins across all of its major operating areas.

Alibaba saw a significant increase in its mobile segment revenues. The numbers were 10 folds higher than the figures which were recorded during the same time period a year back. Mobile segment alone was responsible for bringing in 22 percent of the company’s total revenues. Alibaba Group Holding Ltd (NYSE:BABA) plans on monetizing its mobile segment in the future as well.

The company’s profit margins, however, have shrunk to 18 percent, which is the lowest margin that it has hit in a period of two years. The company has two important marketplaces under its banner- Tmall and Taobao- which it plans to perk up in the future in order to improve its profit margins.

Market analysts have forecasted an even increased revenue figures for the current quarter, that is, October to December; for the biggest event of the company (annual shopping day) falls in this quarter.

The shares of the company rose from its debut price with an increase of 50 percent. However, the stocks were flat since Monday’s closing to the pre-trading on Tuesday. During the most recent trading session of November 4, 2014, the company started its stocks at a price of $100.43 and closed at an increased price of $104.54, after hitting the highest figures of $104.96. The company’s EPS is recorded to be at 2.81.