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Earnings Expectations for Alibaba in Fiscal 4Q18

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Earnings per share

Alibaba (BABA) is scheduled to release its fiscal 4Q18 (calendar 1Q18) results on May 4, before US trading begins. The company plans to host a conference that day to discuss the results. Wall Street expects Alibaba to report EPS (earnings per share) of $0.89 on revenue of $9.3 billion in fiscal 4Q18. In fiscal 4Q17, Alibaba posted EPS of $0.63 on revenue of $5.60, missing earnings estimates but beating revenue estimates.

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Commerce and cloud drove revenue growth in fiscal 3Q18

In the previous quarter (fiscal 3Q18), Alibaba posted EPS of $1.63 on revenue of $12.8 billion, beating the revenue expectation of $12.6 billion for the quarter. Revenue grew 56% YoY (year-over-year), driven by gains in core commerce and cloud computing, where sales grew 57% YoY and 104% YoY, respectively. Nearly 90% of Alibaba’s revenue came from commerce-related activities.

In the period corresponding to Alibaba’s fiscal 3Q18, revenue grew 38% YoY at Amazon (AMZN), 9.0% YoY at eBay (EBAY), 56% YoY at Tencent (TCEHY), and 38.7% YoY at JD.com (JD). PayPal (PYPL) reported 26% YoY revenue growth in 4Q17, which corresponds to Alibaba’s 3Q18.

Revenue growth expected to be 55%–56%

Alibaba didn’t provide performance guidance for fiscal 3Q18, though it did provide guidance for fiscal 2018. In February, the company raised its guidance for 2018 revenue growth to 55%–56% from 49%–53%. Alibaba generated $23 billion revenue in fiscal 2017, representing 56% growth.

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