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HomeUncategorizedAlibaba worried about coronavirus impact despite posting 58% gains in Q4 2019

Alibaba worried about coronavirus impact despite posting 58% gains in Q4 2019

Alibaba earnings call

It is a well-known fact that the Coronavirus epidemic has become the worst outbreak of the disease in the last few decades in China and all over the world. This outbreak has not only impacted businesses and economies in China but it is taking lives of people too. The fact that there is no vaccination found as yet of this virus makes it even worse. Now, we know that the e-commerce industry in China is said to be on the rise since people are ordering at home due to the virus impact.

Still, it is also true that the revenues of all e-commerce companies will plunge as people are not likely to buy anything other than essentials during this troubled time. Having said that, we just saw that Alibaba has posted their earnings report for last quarter of 2019 and it is seen that the revenues of the company jumped by 58% as compared to Q4 2018. Now, this was also expected since the 11.11 sale took place during this period and the holiday sales in the US were also going on.

However, it is quite evident that Alibaba Group knows that they will have a rough time in the first half of 2020 because of the coronavirus outbreak. As they have already noted that “The [coronavirus] outbreak is having a significant impact on China’s economy, and may potentially affect the global economy,”. Alibaba official, during the earnings call, also says that “It will present near-term challenges to the development of Alibaba’s business across the board.”

Now, this is clearly Alibaba’s way of telling its investors that earnings will not be anywhere near expectations and the markets should adjust their expectations according to that. Also, Alibaba’s CFO says that they have noticed in “past 12 to 13 days since the start of February, that our overall revenue growth rate will be negatively impacted in the March quarter,”

Zen Science
Author: Zen Science

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