Alibaba shares fall 7% after the Chinese tech giant posts 86% drop in profit

Shares of Alibaba fell sharply on Tuesday after the Chinese tech giant's net profit plunged in the fiscal fourth quarter.

Here's how Alibaba did in the March quarter versus LSEG consensus estimates:

Net income attributable to ordinary shareholders came in at 3.3 billion yuan, down 86% year on year.

Shares of Alibaba were about 7% lower in U.S. midday trading after falling as much as 8.1% earlier.

Alibaba had a rocky year in 2023, when it carried out its largest-ever corporate structure overhaul. It also separately implemented several high-profile management changes, with company veteran Eddie Wu taking over the reins as chief executive in September.

In a bid to signal confidence to shareholders, the Chinese tech giant said earlier this year that it increased its share buyback program by $25 billion through the end of March 2027.

Alibaba has been grappling with cautious consumer spending in China, but saw signs of a slight recovery in its core e-commerce business in the March quarter.

The Hangzhou-headquartered company has been ramping up its overseas push amid a domestic slowdown, where Alibaba has faced rising competition from low-cost players like PDD.

Revenue for the Taobao and Tmall division, which houses Alibaba's China e-commerce business, rose 4% year on year to 93.2 billion yuan. That was faster than the 2% growth in the previous quarter.

Customer management revenue — which is sales received from services such as marketing that Alibaba sells to merchants on its Taobao and Tmall e-commerce platforms — rose 5% year on year, after coming in flat in the previous quarter. Alibaba's international commerce business also logged a revenue increase of 45% year on year to 27.4 billion yuan.

Earlier this year, CEO Wu vowed to