Alibaba Stock Earnings News: BABA shares rise as profits outperform in FQ4

Alibaba (BABA) easily beat Wall Street’s pessimistic forecast for the fiscal fourth quarter (FQ4) early Thursday. The Chinese online retail conglomerate and cloud provider posted $1.56 in adjusted earnings per average diluted share compared with a general forecast of $1.35. Revenue of $30.32 billion beat analyst consensus by $410 million but rose just 2% YoY.

BABA stock rose 1.2% to $91.70 in Thursday’s premarket session, while upstart competitor JD.com (JD) fell an equal amount.

Alibaba stock news: Unlocking shareholder value through spin-offs, IPOs

While the results were decent in the quarter, management said its main focus was unlocking shareholder value.

“We are taking concrete steps towards unlocking value from our businesses and are pleased to announce that our board has approved a full spin-off of the Cloud Intelligence Group via a stock dividend distribution to shareholders, with intention for it to become an independent publicly listed company,” said CEO Daniel Zhang in a statement.

“We have established a capital management committee at the Alibaba board level to undertake a comprehensive capital management plan to enhance shareholder value,” said CFO Toby Xu. “We are delighted to share that our board has approved the process to start external financing for Alibaba International Digital Commerce Business Group; exploration of IPO for Cainiao Smart Logistics Group; and execution of IPO for Freshippo.”

Net income of $3.2 billion was robust “primarily due to net gains arising from increases in the market prices of our equity investments in publicly-traded companies.” Adjusted earnings per share rose 35% YoY.

The international retail segment, which houses such flagship brands as Lazada, AliExpress, Trendyol and Daraz, saw order volume rise 15% YoY. Orders for the domestic Chinese services segment rose 20% YoY.

Alibaba stock forecast

BABA stock has definitely been on a shy uptrend of late. After bottoming out near $80 in the early part of May, the stock began rising as the earnings date got closer. Now that it has been reported, traders will watch intently on where BABA leans next.

Breaking through the $103 to $105.32 resistance range is the primary concern. This region pushed BABA stock back down in March and April, and bulls are looking to break it once again on their march back up to the $120 price point. That last level has served as the divider between neutral and bullish outlooks over the past year.

BABA daily chart