HANGZHOU, China — Alibaba Group Holding Ltd.’s quarterly revenue beat analysts’ estimates as cloud computing services surged and its core e-commerce business held up despite a slowing Chinese economy.
Revenue at China’s biggest e-commerce company rose 59 percent to 32.15 billion yuan ($4.8 billion) in the three months ended June, the company said. That compares with the 30.2 billion-yuan average of estimates compiled by Bloomberg. Net income was 7.1 billion yuan, also beating estimates.
As with Amazon.com Inc., Alibaba is positioning cloud computing as one of its fastest growing businesses, eyeing top share in Japan in two years and beefing up its presence in the Middle East and US That effort comes as economic growth at home exhibits signs of further deterioration, hurting the consumer demand that its e-commerce operation relies on.
“Alibaba’s cloud business holds a significant market share in China,” Yu Jianpeng, a Hong Kong-based analyst at ICBC International Research Ltd., said before the earnings. “It’s still one of the fastest-growing sectors for the company.”
Alibaba, which reached a 3 trillion yuan milestone of goods sold for the year ended March, is also venturing abroad. It made its largest overseas acquisition with a $1 billion deal for control of Lazada Group SA, gaining access to six Southeast Asian markets. Alibaba incorporated Lazada’s financials for the first time in its June-quarter results.
Adjusted earnings per share were 4.90 yuan, beating estimates for 4.20 yuan.
Shares of Alibaba climbed 2.5 percent to $87.33 in New York Wednesday. The stock has gained 7.5 percent this year compared with a 6.2 percent gain for the NYSE Composite Index.
By Lulu Yilun Chen; editors: Robert Fenner and Edwin Chan.