Alibaba.Com Q1 2012 Profits: $53.8 MillionBy: Shawn Hess - April 23, 2012
Alibaba.com reports $53.8 million profits this quarter, but also shows that growth has slowed as they invest in stronger partnerships and more refined user experiences. As a small business e-commerce company they have remained focused on enhancing buyer and seller experiences, and aim to increase the quality of the marketplace.
Jonathan Lu, CEO and Executive Director of Alibaba.com explains:
“In the first quarter, we remained focused on our goal of providing exceptional buyer and seller experiences by enhancing the quality and depth of product and company information available on our platforms,”
“As expected, our continuing investment in upgrading our business model and our higher membership standards for suppliers has negatively impacted our financial performance. Nonetheless we strongly believe that information quality and member quality are fundamental for our success and business model upgrading will further benefit both customer and our business in the future. We are positive that these efforts will ultimately benefit our SME customers.”
Total revenue for Q1 2012 was $252.2 million, which is a 3.7% increase year-over -year, but a 4.2% decrease from last quarter. $145.4 million in revenue comes from the international marketplace, while 86.6 million comes from the Chinese marketplace. $20.2 million came from other sources including HiChina.
Alibaba earned $197.6 million in gross profits and remained flat year-over-year, but actually decreased 4.2% when compared to last quarter. Earning before interest and tax reached $59.5 million which is an almost 27% decrease from the same period last year and a 29.1 decrease from last quarter.
Profit attributable to equity owners also fell 12% from last quarter and over 25% year-over-year to $53.8 million. Earnings per share came in at $1.08 as opposed to $1.35 in the same quarter last year. Recurring cash flow also decreased at an astounding rate of almost 88% to $3 million year-over-year and 98% from last quarter.
The good news is they experienced an almost 25% increase in year-over-year cash and bank balances. So while businesses is picking up and they are investing heavily in their future, it has detrimentally effected their bottom line for at least the first quarter of 2012.