Alibaba earnings drop on increased investment in new businesses
HONG KONG -- Net profits for Alibaba Group Holding declined 8% last quarter as the Chinese e-commerce conglomerate stepped up investments in new businesses to fend off rivals.
During the April-June quarter, Alibaba reported revenues of 205.74 billion yuan ($31.83 billion), up 34% from the same period last year. This slightly missed the average market estimate of 209 billion yuan, according to a survey of analysts by Refinitiv.
"We are investing our excess profits and additional capital to support our merchants and invest in strategic areas to better serve customers and penetrate into new addressable markets," said Group Chief Financial Officer Maggie Wu in a statement.
The company posted net income by U.S. accounting standards of 42.84 billion yuan while its operating margin narrowed from 23% to 15%.
Wu, though, said that Alibaba would expand its share buyback