Can Alibaba Beat Expectations in Fiscal 4Q17?



American jobs promise

Alibaba Group Holding (BABA) is expected to report its fiscal 4Q17 results on May 18, 2017. It will be the company’s first full quarterly report since its co-founder and chair Jack Ma met with President Donald Trump to discuss investments in the United States (SPY).

Alibaba used the meeting to pledge that it will use its resources to create new jobs for Americans. Similar job promises have been made by companies such as Amazon (AMZN) and SoftBank, a major investor in Alibaba. SoftBank is also the parent company of phone carrier Sprint (S).

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With that in mind, investors will be very interested in Alibaba’s investment and jobs creation plans and how such programs might affect their value in the company. The one line that Alibaba has repeated many times is its ambition to help American businesses sell their products in China where an expanding middle class is driving up demand for Western items. What progress has the company made so far? That’s one of the questions begging for an answer in the upcoming report.

The benchmark is set

For Alibaba’s upcoming report, Wall Street has set a benchmark. The average estimate of analysts polled by Reuters shows that Alibaba is expected to post EPS (earnings per share) of 4.8 yuan in fiscal 4Q17. It posted EPS of 9.0 yuan in fiscal 3Q17, topping the average estimate of 7.8 yuan. In the year-ago quarter, its EPS was 3.0 yuan, missing the estimate of 3.6 yuan.

Revenue of at least 35.8 billion yuan

On the top-line side, Wall Street is expecting Alibaba’s revenue to be 35.8 billion yuan in fiscal 4Q17. The company has topped revenue estimates in all the trailing four quarters. Its revenue of 53.3 billion yuan in fiscal 3Q17 exceeded the estimate of 50.2 billion yuan. The year-ago revenue of 24.2 billion yuan also came in above the estimate of 23.2 billion yuan.


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