The company revealed that it will scrap the spin-off of its cloud unit in response to chip export restrictions imposed by the United States.
Alibaba (BABA) falls 8% on Wall Street due to premarket after presenting its results corresponding to the third trimester, in which it earned $27.7 billion yuan (US$3.8 billion), below what the market expected. Additionally, he revealed that he will scrap the spin-off of his cloud unit in response to export restrictions on chips used in artificial intelligence applications imposed by the United States.
The consensus of analysts predicted a profit of 29.7 billion yuan, which the company failed to meet. However, in the game of revenue exceeded estimates, by harvesting 224.79 billion yuan (US$31 billion), compared to the 224.3 billion yuan projected by the market.
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Alibaba: what variables affected profits
The Economic recovery of China has been uneven. While the industrial and retail sectors performed better than expected, real estate, affected by the crisis, continues to undermine consumer confidence.
Alibaba resorted to pressuring merchants to apply aggressive pricing during its Singles’ Day festival, as it seeks to take on competitors such as Douyin and PDD Holdings’ Pinduoduo, which have been selling lower-cost products all year.
It is about the first quarterly results from Chief Executive Eddie Wu, one of the co-founders of Alibaba Group and a long-time lieutenant of former boss Jack Ma, who took over from former group CEO Daniel Zhang in September.
Source: Ambito
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