Chinese internet giant Alibaba (BABA) is set to report Q3 results tomorrow before the market opens with a conference call to follow at 7:30am ET. 

Current Capital IQ consensus stands at EPS of $11.51 on Revenue of $118.56 bln. 

The importance here will be how China’s slowdown is going. Second to that will be any insight on how tariffs have impacted the “red state”. The slow down in China has been going on for a few years as the government and central bank have been trying to deleverage the credit system.

Expectations are low after the company cut its revenue growth outlook for FY19 by 4-6% from the original projection of 60% in its last earnings report.

Guidance

In Q2, BABA revised it's fiscal year 2019 revenue guidance to a range of RMB375 billion to RMB383 billion. The new guidance range reflects a 4% to 6% adjustment to the original revenue guidance.

Q2

BABA reported Q2 (Sep) earnings of $1.40 per share, excluding non-recurring items, $0.30 better than the S&P Capital IQ Consensus of $1.10. Revenues rose 49.6% year/year to $12.4 bln vs the $12.51 bln S&P Capital IQ Consensus.

Retail Sales growth in China was 9%. BABA said the weakness was in large ticket items (home appliance and auto). It did see continued robust growth in staples, cosmetics and apparels, slow down in cell phones due to the lack of new offerings.

TECHS:

Shares of BABA have fallen from over $200 in June to the $130’s in mid-December when so many stocks saw their 2018 lows.

Since then the stock has bounced back 30 points to test this key resistance level of $160 which held serve in mid-November when the Single's Day figures came in below expectations.

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