Alibaba’s profits beat expectations as losses at several companies narrowed

Alibaba Group Holding has overcome Wall Street analysts’ expectations for its fourth-quarter earnings, thanks to the reduction of losses in several business units.

During the quarter, there was a year-on-year decrease in losses in different segments of the company, such as the value-for-money platform Taobao Deals, the community market Taocaicai, Local Consumer Services and the Digital Media and Entertainment business.

Adjusted EBITDA, a non-GAAP measure used to assess the company’s operating performance, increased 37% year-over-year to RMB 32.12 billion ($4.7 billion) in the quarter. These results beat consensus forecasts of around RMB 30 billion compiled by Bloomberg and Refinitiv. Industry analysts attribute this success to cost control implemented by Alibaba in recent quarters.

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Diluted earnings per American depositary share (ADS) was RMB 9.00, beating consensus estimates of RMB 5.61 and RMB 5.16 from Bloomberg and Refinitiv, respectively.

Alibaba Chairman and CEO Daniel Zhang said: “In an increasingly complex world, we have proactively transformed our organization to strengthen the competitiveness of our businesses through greater independence to meet the changing needs of different clients and capture new opportunities”.

Market analysts expect Alibaba to remain focused on profitability after the biggest restructuring in the company’s history, announced in March. At the time, Alibaba revealed plans to reorganize into a group holding company with six major business groups and various other investments.

This reorganization will allow each company within the group to make an initial public offering, which in turn will drive financial discipline and transparency in the capital markets.