NEW YORK (AP) - Chinese e-commerce powerhouse Alibaba's Group reported adjusted fourth-quarter earnings that beat expectations as its user base continued to grow and shoppers bought more on mobile phones.
NEW YORK (AP) — Chinese e-commerce powerhouse Alibaba's Group reported adjusted fourth-quarter earnings that beat expectations as its user base continued to grow and shoppers bought more on mobile phones.
Its revenue surged 40 percent during quarter that included the holiday season but analysts were expecting more. That sent shares down 7 percent in premarket trading.
The news comes as the company, which went public in September in the U.S. in the biggest IPO ever, is facing a critical report from Chinese regulators that it is failing to do enough to prevent fake goods from being sold on its websites. Alibaba said the report is unfair and it is preparing a formal complaint.
In the October to December quarter, net income fell 28 percent to 5.84 billion yuan ($957 million), or 37 cents per share, from 8.27 billion yuan a year ago. Excluding one-time stock option and other costs, earnings totaled 81 cents per share. That beat analyst expectations of 75 cents per share, according to a survey by FactSet.
But revenue during the crucial holiday quarter was disappointing. It rose to 26.18 billion yuan ($4.22 billion) from 18.75 billion yuan, but that fell short of expectations for $4.44 billion.
Alibaba's users increased use of its platforms like Taobao Marketplace and Tmall.com on their mobile phones. Annual active buyers rose 45 percent in 2014 to 334 million, while mobile monthly active users rose 95 percent in 2014 from 136 million to 265 million.
Addressing the Chinese report In a call with analysts on Thursday, the vice chairman Joe Tsai said the company believed the report is flawed and unfairly targeted Alibaba. Some analysts have said Alibaba should have disclosed that meeting in its IPO filing, but Tsai said that the meeting with regulators in July was one of many regular meetings "in the normal course of business," rather than a formally announced investigation.
"We believe the flawed approach taken in the report, and the tactic of releasing a so-called 'White Paper' specifically targeting us, was so unfair that we felt compelled to take the extraordinary step of preparing a formal complaint to the SAIC," he said. He also said that the SAIC, a Chinese government regulator, has removed the report from its Web site.
Tsai said the company was devoting more resources to the "fight against fakes" but said it had more work to do. "In the global e-commerce marketplace there will always be people who seek to conduct illicit activities, and like all global companies in our industry, we must continue to do everything we can to stop these activities."
Shares fell $6.95, or 7.1 percent to $91.50 in premarket trading. Since going public in September, the stock had been up about 5 percent.