Alibaba's Stock Drops After Profit Misses Expectations

Shares of Alibaba Group Holding Ltd. dropped 2.8% in premarket trade Thursday, after the China-based ecommerce giant reported a fiscal fourth-quarter profit that fell short of expectations. Net income for the quarter to March 31 nearly doubled to the U.S. dollar equivalent of $1.55 billion, or 60 cents a share. Excluding non-recurring items, adjusted earnings per share in U.S. terms was 63 cents, missing the FactSet consensus of 65 cents. Revenue increased 60% to $5.61 billion, above the FactSet consensus of $5.24 billion, as revenue for core commerce rose 47% to $4.59 billion, for cloud computing doubled to $314 million and for digital media and entertainment more than tripled to $571 million. Fiscal 2017 gross merchandise volume on China retail marketplaces grew 22% to $547 billion, with mobile GMV rising 49% to $433 billion, or 79% of total GMV. Separately, the company said it launched a new $6 billion stock repurchase program, primarily to offset dilution from share-based compensation programs. The stock has soared 37% year to date through Wednesday, while the S&P 500 has gained 5.3%.