Alibaba (NYSE:BABA) announced plans to spin off its cloud division as a separate, publicly-traded company, while the e-commerce titan’s quarterly revenues missed expectations.
“We are taking concrete steps towards unlocking value from our businesses and are pleased to announce that our board has approved a full spin-off of the Cloud Intelligence Group via a stock dividend distribution to shareholders, with intention for it to become an independent publicly listed company,” company CEO Daniel Zhang said.
Here’s how Alibaba did in the quarter, which ended Mar. 31, 2022, compared with Refinitiv consensus estimates: Revenue came in at 208.2 billion Chinese yuan ($29.6 billion) vs. 210.2 billion yuan expected, up 2% year on year; Non-GAAP diluted earnings per share turned out to be 1.34 yuan vs. 2.08 yuan expected, up 35% year-on-year
The report is Alibaba’s first since splitting into six units and is also the first whose numbers reflect China’s reopening. The country in December abruptly ended its strict COVID controls, such as lockdowns and travel restrictions.
The year got off to a tepid start, with overall sales of online physical goods staying weak, bosses of major e-commerce platforms suggested in February.
Retail sales in China rose by 18.4% in April, according to recent economic data. China’s economy grew 4.5% in the first quarter, achieving the fastest pace in a year. The performance was expected to boost Alibaba’s sales.
BABA shares fell $2.34, or 2.6%, to $88.34.
