China’s e-commerce and entertainment giant Alibaba beat market expectations with a strong second financial quarter in the three months to September. Entertainment grew substantially, but remains in an investment phase.
Quarterly revenue was up by 55% to $5.14 billion. Net income was $1.36 billion with adjusted EBITDA of $2.38 billion, giving earnings per share of $0.45 or $0.79 using the non-GAAP method.
The group’s digital entertainment and media businesses remained in loss during the quarter, but the activity was several times larger than a year ago. Revenue grew from RMB898 million in the same quarter last year to RMB3.61 billion. EBITDA losses in the segment grew fromRMB651 million to RMB1.40 billion.
“We maintain our competitive position in digital entertainment in China through a combination of licensed premium content and self-produced programming,” the company said. Earlier this week the group announced the consolidation of all its digital media businesses and the proposed launch of a $1.5 billion content fund.
The performance of Youku Tudou, the streaming video giant that it finally acquired late last year, was highlighted. Its exclusive broadcast of “Just One Smile Is Very Alluring,” a 30-episode romantic comedy, generated billions of video views. Youku Tudou also released jointly-produced variety show “Mars Intelligence Authority” and self-produced TV series “Ten Deadly Sins,” which attracted strong viewership.
In early trade Wednesday on the New York Stock Exchange, Alibaba’s ADR shares were up 2% at $103.15.