Alibaba reported quarterly results early Thursday that beat expectations on the top and bottom lines, while indicating business conditions improved in June. BABA stock climbed.
The China-based e-commerce giant reported adjusted earnings of $1.75 per American Depositary Share on revenue of $30.7 billion, for its June quarter. Analysts expected Alibaba to report earnings of $1.58 a share on revenue of $30.1 billion, according to FactSet.
Alibaba stock climbed 1.8% to close at 97.43 on the stock market today. Along with BABA stock, other China issues jumped.
JD.com jumped 3.6% to 63.35. Baidu rose 2.5% to 140.07. And Pinduoduo moved up 3.2% to 51.26.
Meanwhile, Alibaba showed its first quarterly revenue decline as expected, down a slight 0.09% from a year earlier. But that's a departure from consistent double-digit gains in recent years.
Alibaba blamed China's Covid-19 outbreak for the revenue drop. Further, the pandemic hurt its domestic e-commerce business with supply chain and logistics disruptions in April and May.
BABA Stock: Signs Of Recovery In June
"Following a relatively slow April and May, we saw signs of recovery across our businesses in June," Chief Executive Daniel Zhang said in written remarks with the Alibaba earnings release. "We are confident in our growth opportunities in the long term given our high-quality consumer base and the resilience of our diversified business model catering to different demands of our customers."
Increased regulatory scrutiny has weighed on BABA stock and others for the past couple of years. Also, besides a strict regulatory environment, Chinese stocks are also dealing with a slowing economy, Covid shutdowns, supply-chain issues and inflation.
"Despite the challenges posed by the Covid-19 resurgence, we delivered stable revenue performance," Alibaba Chief Financial Officer Toby Xu said in written remarks.
Alibaba's business in China looks a lot like Amazon's U.S. operations. Alibaba's cloud-computing business is showing solid growth, just like Amazon's booming web services business.
Please follow Brian Deagon on Twitter at @IBD_BDeagon for more on tech stocks, analysis and financial markets.
