Alibaba ended the quarter with 307 million monthly active users in mobile, an increase of 18 million from the prior quarter and up 63% year over year.
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Alibaba said its buyback program will be spread over two years and is primarily to offset dilution from stock-based compensation programs.
Nevertheless, the company has been suffering from increased competition in China’s larger cities while the increasing trend in China for shopping via smartphones has not been helpful, as the advertising returns from smartphones are not as lucrative as those from desktop PCs.
The company’s results come at a time when China’s economy is expected to grow at its slowest pace in a quarter of a century.
Following the company’s initial public offering price of $68 in September, shares opened for trading at $92.70.
Gross merchandise volume, a measure of its transactions in its retail marketplaces in China, was up 34% to just over 673 billion yuan for the quarter, which was short of the growth of 38% that was expected by analysts.
Alibaba Group Holding Ltd.’s executive chairman Jack Massachusetts.
On Monday, Alibaba said it would invest $4.6 billion in bricks-and-mortar retailer Suning Commerce Group, a deal that could give it more traction in logistics and electronics, areas in which smaller but growing rival JD.com specializes. Global expansion push is also gaining traction the company having started e-commerce sales in Russian Federation, Brazil, and India. The Chinese internet and e-commerce giant also announced plans to buy back $4 billion of stock.
Alibaba has begun looking overseas to spur sales, both from U.S. companies selling goods on its platforms in China and Chinese sellers reaching worldwide customers.
The $64,000 question: Is Alibaba stock finally a buy after its nine-month, 36% drubbing, or could things still get worse from here?
However it’s not enough to satisfy everyone, with US$3.26bn in revenues shy of analyst estimates (US$3.39bn). On average, analysts forecast that Alibaba Group Holding will post $2.79 earnings per share for the current year.
Alibaba shares fell 5.09% to $73.40 on Wednesday after the company disappointed the Wall Street with its fiscal first quarter results.
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The logo of the Alibaba Group is seen inside the company’s headquarters in Hangzhou, Zhejiang province in this November 11, 2014 file photo. In January, a report by the State Administration for Industry & Commerce accused Alibaba of allowing merchants to operate without required business licenses, to run unauthorised stores that co-opt famous brands and to sell fake wine and handbags.
