UPDATE: 7:15 a.m. EDT — Alibaba’s fourth-quarter revenue, boosted by a better-than-expected growth in its Gross Merchandise Value (GMV), beat analysts’ estimates. In the quarter ending March 31, the e-commerce giant reported revenue of $3.75 billion — a 39 percent increase over the same period last year and better than the consensus estimate of $3.57 billion.
GMV, a key estimate calculated using the total value of merchandise sold on Alibaba’s online platform, rose 24 percent year-on-year to 742 million yuan ($114 million). Analysts had forecast a GMV growth rate of 22 percent in the quarter. However, the company’s net adjusted earnings-per-share missed estimates, coming in at 47 cents. Analysts had projected earnings of 55 cents a share.
“Alibaba Group finished the fiscal year on a very strong note. In March we surpassed RMB3 trillion in annual GMV and our revenue for the year was over RMB100 billion. We achieved strong growth in mobile users, active buyers and transactions,” Alibaba CEO Daniel Zhang said in a statement.
Alibaba's share in New York were up 3.3 percent in premarket trade Thursday.
Chinese e-commerce giant Alibaba will report its fourth-quarter and full-year earnings before markets in the U.S. open Thursday. The company, which surpassed revenue expectations in the previous quarter, is expected to report earnings of 55 cents a share, up from 48 cents a share it reported in the same quarter last year.
Despite the economic slowdown in China, Alibaba’s quarterly revenue is forecast to rise 33 percent, to $3.57 billion from $2.67 billion it reported in the year-earlier period.
“Mobile is set to drive significant growth in digital advertising in China. We believe BABA is positioned to capture the largest share of mobile ad market expansion this year,” Rob Sanderson, an analyst at the financial planner MKM Partners, told MarketWatch.
Alibaba’s Gross Merchandise Value — a key measure of growth of e-commerce businesses — is expected to rise 22 percent in the quarter. The company’s GMV growth has been steadily declining over the past year, partly due to the slowdown in China. Earlier, in March, Alibaba announced that its GMV in the fiscal year 2016 grew 23 percent year-on-year, down from 46 percent growth recorded in fiscal 2015.
The company aims to reach a GMV target of 6 trillion yuan ($460 billion) by 2020. Currently, this figure stands at 3 trillion yuan ($230 billion).
“Alibaba is stuck in this box where value investors like it, but the incremental investors need to find some growth, whether it’s accelerating revenue or improvements in gross merchandise volume,” Chi Tsang, an analyst at HSBC Securities Asia, told Bloomberg.
In recent months, Alibaba has been aggressively expanding its business, both domestically and globally. However, despite its recent $1 billion acquisition of the Singaporean e-commerce startup Lazada, cross-border e-commerce is still not a significant part of Alibaba’s business.
New York-listed shares of Alibaba closed flat Wednesday, before rising 0.9 percent in after-hours trade. Year-to-date, the company’s stock has dropped over 7 percent, underperforming the broader market index.