China-based Alibaba Group has announced its revenues for the quarter ended June 30 increased by 28% to $3.26 billion, a disappointing number for analysts who expected sales to reach upwards of $3.4 billion. After the earnings release, the company’s stock [NYSE: BABA] fell by nearly 7% in pre-market trading to $72, even as the firm realized strong profits. Per-share earnings, excluding one-time actions like restructuring, rose 21% to 59 cents a share, exceeding forecasts.
Several factors, including a weakened Chinese economy and ongoing accusations that the company permits counterfeiting on its sites, have driven down the company’s valuation by as much as $100 billion since its IPO last year. In an effort to stabilize its share price, Alibaba announced this week a plan to buy back $4 billion in stock over a two-year period.
While Alibaba’s short-term results are mixed, analysts still largely see long-term growth for the company – especially as it diversifies its services and continues its push into overseas markets. Although in transition, the firm is making strides with mobile, as the number of active users on its mobile platforms grew to 307 million at the end of the quarter, up from 188 million a year earlier. Alibaba said mobile transactions made up 55% of its overall dealings. Across its retail marketplaces, Alibaba’s gross merchandise volume for the quarter jumped 34% and annual active buyers rose year-over-year by 32%.
Led by Executive Chairman Jack Ma, a member of Counselor’s Power 50, Alibaba has aggressively pursued a global expansion strategy, recently investing in Amazon competitor Jet.com and popular messaging app Snapchat. Its AliExpress platform is now the top shopping site in Russia and Brazil and Alibaba.com remains a major B2B Web presence, selling millions of items including promotional products. Signaling a desire for even more international gains, Alibaba this month named Michael Evans its president. The former Goldman Sachs partner is tasked with striking partnerships with key brands and retailers in Europe, the Americas, and Asia.