Third quarter earnings at Chinese e-commerce giant Alibaba topped Wall Street expectations, results that come as key U.S. companies warn investors of a potential slowdown in the nation's economy in 2019.
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Profits at Alibaba in the three months through December rose 33 percent to $4.5 billion. Adjusted net income was $1.77 per share, higher than the $1.64 that analysts expected. Revenue at the surged 41 percent to $17 billion, it said on Wednesday, less than what analysts predicted.
“Our resilient operating and financial performance is a direct reflection of our persistent focus on better serving our growing base of nearly 700 million consumers,” CEO Daniel Zhang said.
Alibaba’s signature online store had 699 million mobile active users in the quarter, a 33 million increase over the prior three-month period. Revenue in its cloud computing sector grew 84 percent to $962 million, while membership in its online video stream site increased 64 percent in the quarter.
China’s population of nearly 1.4 billion makes it the world’s most lucrative consumer market. While its economy has surged in the past decade and provided immense expansion opportunity for U.S. companies, a potential economic slowdown is rippling through a slew of industries, from auto to consumer technology and industrials.
Caterpillar – which counts as much as 10 percent of its sales from the region – said the market would be roughly flat in 2019. Chip-maker Nvidia cut its revenue outlook due to “deteriorating macroeconomic conditions, particularly in China” And at Apple, quarterly revenue in the country was down 27 percent to $13.1 billion.
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One key factor in the decline is President Trump’s tariffs on $250 million in imports from the country.
The U.S. and China are poised on Wednesday to continue discussions in Washington D.C. on a deal to address the trade deficit between the two nations. While White house officials are optimistic about reaching an agreement, critical issues – like Beijing’s theft of intellectual property and proper enforcement mechanisms – remain unresolved.
Top White House economic advisor Larry Kudlow on Tuesday declined to tell Fox Business whether Trump would remove those tariffs if a deal is reached.