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Alibaba’s Earnings per Share: What’s the Trend?

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A mixed earnings track record

Alibaba (BABA) is gearing up to report its fiscal 2Q18 (September quarter) financial results on November 2, 2017, before the US (SPY) market opens. Its US e-commerce rival eBay (EBAY) released its September quarter earnings on October 18, 2017, and Amazon (AMZN) will release its earnings on October 25, 2017.

Alibaba’s earnings results for the last several quarters shows a mixed trend.

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Alibaba beat EPS estimate in fiscal 1Q18

For fiscal 1Q18 (June quarter), Alibaba posted adjusted EPS (earnings per share) of 7.95 yuan, or about $1.17. That was above the consensus estimate that called for adjusted EPS of 6.23 yuan for the quarter. On a year-over-year basis, its EPS rose 65.0%.

For fiscal 4Q17 (March quarter), Alibaba posted adjusted EPS of 4.35 yuan, a 45.0% rise from the same quarter a year earlier. However, it was below the consensus estimate of 4.46 yuan.

Wall Street expecting EPS improvement

What could the future hold for Alibaba? Analysts on average are expecting its fiscal 2Q18 adjusted EPS to be 6.90 yuan. That indicates that analysts expect Alibaba’s EPS to improve from the similar quarter last year. Alibaba posted adjusted EPS of 5.26 yuan in fiscal 2Q17.

Alibaba has been working to rid its e-commerce platforms of counterfeit goods, expand its e-commerce operations in China (MCHI) and abroad, and diversify into operations beyond its core e-commerce. It will be interesting to see how spending associated with these activities may have impacted Alibaba’s EPS in fiscal 2Q18.

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