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Abu Dhabi, UAEThursday 13 December 2018

Alibaba beats profit estimates as tech earnings season enters full swing

Apple expected to hit record profits despite questions about iPhone X demand

Information gathered by Chinese internet major a plus for product makers and marketers alike. EPA
Information gathered by Chinese internet major a plus for product makers and marketers alike. EPA

Alibaba’s revenues beat analysts' expectations for its financial third quarter, the company announced yesterday, as analysts awaited earnings announcements from Amazon, Apple and Google’s parent Alphabet.

Revenues of China’s largest e-commerce firm rose 56 per cent year-on-year in the three months ending December to 83 billion yuan (Dh48.4bn), coming in ahead of the 79.8bn average estimate of analysts polled by Thomson Reuters.

Alibaba, whose 2014 IPO in New York set a record for the world’s largest sharelisting, said on Thursday that it would acquire a 33 per cent stake in its payment affiliate Ant Financial, the world’s most valuable FinTech firm.

“This acquisition of Ant Financial’s stake could be a preparation for its potential IPO,” Steven Zhu, a Shanghai-based analyst with Pacific Epoch, told Bloomberg.

“Alibaba was able to improve revenue growth because performance-based ads were able to generate better revenue on mobile apps and its catered user pages drove more sales.”

Alibaba’s earnings came ahead of results from its US counterpart Amazon, which was due to release its fourth quarter results as The National went to press.

Amazon shares rose strongly in pre-trade before Thursday’s open, on the expectation that the retailer’s results will be lifted by strong sales from the holiday season.

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Apple is expected to report record profits early Friday morning UAE time. But analysts are increasingly concerned that the company’s flagship iPhone X, launched in November, is experiencing slower-than-forecast sales.

Amazon, Apple and Google’s parent Alphabet are all due to release their quarterly results after the close of trading in New York on Thursday.

The world’s largest tech firms have so far reported mixed fortunes for the three months to the end of December.

Facebook’s shares dropped after the social networking company said that time spent on its site fell by 5 per cent during the quarter, even before making sweeping changes to its newsfeed. The stock has subsequently rebounded following the company’s earnings call disclosed that the average price per Facebook ad rose by 43 per cent during the quarter.

E-commerce platform eBay’s shares surged 11 per cent on Thursday after reporting a 10 per cent rise in gross merchandise volume to $24.4bn for the quarter.

Things were not so rosy for the platform’s payments partner PayPal, after eBay announced it had signed up a Dutch payments firm, Adyen, as a new primary payment processor.