NEW YORK - Alibaba (NYSE:BABA) Group Holding Ltd. (NYSE:BABA) saw its shares decline by 9.3% today, after the company reported a shortfall in fiscal second-quarter sales and announced a decision against spinning off its cloud business, citing concerns about the new U.S. semiconductor policy. Despite the revenue miss by $230 million, Alibaba still managed to exceed earnings expectations with a top line of $2.14 per share, surpassing Wall Street consensus by 5 cents.
The e-commerce giant's adjusted earnings for American Depositary Share (ADS) owners increased by 21% year-over-year, while revenue grew by 8.5% to $30.81 billion. Management attributed the revenue dip to a strategic shift towards higher-quality revenue streams, moving away from lower-margin projects.
In response to investors' concerns and to enhance shareholder value, Alibaba has introduced a $1 annual dividend for ADS shareholders, which translates to a forward dividend yield of nearly 1%. This dividend is scheduled for payment on January 18, 2024. Moreover, during the second quarter, Alibaba invested $1.7 billion in repurchasing 18.6 million ADSs.
The semiconductor industry plays a crucial role in modern computing and has seen significant advancements over the years. By 2022, chip process nodes had been miniaturized to just 3 nanometers—almost the size of human DNA strands. The industry's revenues approached $600 billion in 2022, with over one trillion semiconductor units shipped in 2021 alone. Key countries in the semiconductor supply chain include Taiwan, the United States, China, South Korea, Japan, and Israel.
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