Before the opening bell on Friday, Alibaba Group Holding Limited (BABA, Financial) issued its results for the second quarter of fiscal 2020, which ended on Sept. 30.
The stock price climbed $1.99 or 1.13% to $178.57 per share after pro forma earnings per share of $1.83 beat consensus estimates by 33 cents and revenue of $16.65 billion topped projections by $180 million. Year over year pro forma earnings per share increased 36%, while revenue grew 40%.
Alibaba also posted GAAP earnings per share of $3.85, reflecting a boost of 261% from the year-ago quarter.
The Chinese multinational conglomerate holding company manages its activities through four segments. Total core commerce went up 40% to $14.16 billion in revenue, cloud computing went up 64% to $1.3 billion, digital media and entertainment went up 23% to $1.02 billion, and innovation initiatives and others went up 14% to $169 million.
Executive Chairman and Chief Executive Officer Daniel Zhang commented:
Alibaba Group celebrated its 20th anniversary in September, marking an important milestone on our 102 year journey to make it easy to do business anywhere. Our digital economy continues to thrive and prosper. We aim to serve over one billion annual active consumers and help our merchants achieve over RMB10 trillion in annual gross merchandise volume by end of fiscal 2024. We will continue to invest in the user experience and innovative technology to create new value for consumers, as well as the millions of enterprises undergoing digital transformation in the new digital economy.
In the second quarter of fiscal 2020, the China retail marketplaces of Alibaba expanded by 2.8% to 693 million annual active consumers, and mobile-monthly-active users increased by 4% to reach 785 million .
Year over year, other relevant changes in second-quarter figures were a 39% increase in earnings before interest, taxes, depreciation and amortization to $5.2 billion and a 51% rise in operating cash flow to $6.62 billion. Also, the adjusted free cash flow expanded 90% to $4.27 billion.
Alibaba concluded the second quarter of fiscal 2020 with $32.913 billion in cash on hand and short-term securities and $20.4 billion in total debt representing less than one-fourth of total shareholders’ equity of $84.34 billion. The interest coverage ratio, which measures the ability of the company to pay interest expenses on the outstanding debt, is 13.9%, indicating the company is not encountering any difficulty in managing its sebt. The balance sheet is solid. Nonetheless, Alibaba doesn’t pay a dividend.
The share price closed at $176.7 at the end of regular trading on Thursday for a market capitalization of roughly $460 billion. In the past year through Oct. 31, the share price appreciated 20% to place above the 200-, 100- and 50-day simple moving average lines.
Disclosure: I have no positions in any security mentioned.
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