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What to Expect from Alibaba's (BABA) Quarterly Earnings Results?

Benjamin Rains

Shares of Alibaba BABA have surged 35% in the last six months to easily outpace the S&P 500’s 16% climb and fellow e-commerce giant Amazon’s AMZN 20%. And Alibaba is set to report its quarterly financial results before the market opens on Thursday, February 13.

Alibaba reportedly controls roughly two-thirds of China’s e-commerce market. Last quarter, its mobile monthly active users hit 785 million, up 30 million from the year-ago period. “With sustained consumer engagement and spending across the Alibaba Economy, we have continued our revenue and profit growth, as well as strong free cash flow that enable us to invest in long-term growth,” CFO Maggie Wu said in prepared remarks last quarter.

Investors should also note that Alibaba has expanded its logistics business to help it grow outside of major markets like Beijing and Shanghai. On top of that, the firm has expanded beyond its core commerce unit, which still accounted for 85% of total sales last quarter.

Alibaba hopes to become a larger competitor in the growing cloud computing market, which includes giants such as Amazon, Microsoft MSFT, Google GOOGL and others. With this in mind, BABA’s cloud computing segment surged 64% last quarter. Meanwhile, it continues to try to expand its digital media and entertainment businesses in the Netflix NFLX era.

Looking ahead, our Zacks estimates call for Alibaba’s quarterly revenue to jump 33% to $22.68 billion. At the bottom end of the income statement, Alibaba’s adjusted quarterly earnings are expected to climb over 27% to $2.25 per share.

Alibaba is currently a Zacks Rank #3 (Hold) that has topped our bottom-line estimates by an average of 18% in the trailing four quarters.

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