Shares of Alibaba Group Holding Limited (BABA) dropped over 4% in pre-market trading on Tuesday, settling at $80.94. This decline followed the Chinese e-commerce giant's announcement of a fourth-quarter profit that fell short of analysts' expectations.
The company's net income for the fourth quarter saw a sharp decline, plummeting to 3.27 billion Chinese yuan ($453 million) from 23.52 billion yuan in the previous year. This decrease was largely due to losses from investments during the quarter, in contrast to gains in the same period last year.
Earnings per American Depositary Share (ADS) were reported at 1.30 yuan ($0.18), down from 9.00 yuan a year earlier.
When excluding certain items, Alibaba's adjusted net income for the quarter was 24.42 billion yuan ($3.38 billion), compared to 27.38 billion yuan the previous year. Adjusted earnings per ADS were 10.14 yuan ($1.40), slightly down from 10.71 yuan last year.
The company reported earnings per share (EPS) of $0.02, with an adjusted EPS of $1.40 for the quarter.
On average, 19 analysts surveyed by Thomson Reuters had anticipated the company to post earnings of $1.41 per share for the quarter.
Despite the profit shortfall, Alibaba's revenue for the quarter rose by 7%, reaching 221.87 billion yuan ($30.73 billion), up from 208.20 billion yuan the previous year. Wall Street analysts had expected revenues of $30.39 billion for the quarter.
Alibaba shares had closed at $84.60 on Monday, marking a 5.70% increase. Over the past year, the stock has fluctuated within a range of $66.63 to $102.50.
