Alibaba Group Holding Ltd set to release Q2 revenue, experts study how Chinese economic meltdown affected its performance

Alibaba Group Holding Ltd will report on the opening bell of October 27 its second quarter earnings for the fiscal year 2016. Investors and analysts are closely watching its earnings to determine how China's economic slowdown affected the giant e-commerce performance for that quarter.

Smarter Analyst reported that analysts predict Alibaba to post a quarterly revenue of $3.36 billion and $3.43 per share earnings, which would be a 185 percent year-over-year increase. During its first quarterly performance in the same fiscal year, the company reported $3.68 earnings, which is just a bit higher than the expected $3.60.

According to Bidness ETC, China's economic slowdown has great adverse effects on the growth prospects of Alibaba, which has already been suffering from a downward trend even before the Chinese economic woes hit earlier this year. Sine China is Alibaba's most important market, the turbulent economic environment in the country could be at the company's disadvantage. Consumer spending could drop to very low levels, due to the economic slowdown of the country. Since Alibaba is the major player in the Chinese e-retail industry, investors are concerned with the challenges that the e-commerce company has to face to earn income. The 2QFY16 will offer a clearer picture for investors on the issues mentioned.

To get a bit of an idea on how the report will turn out, Yahoo! writes that Alibaba's higher investments in the mobile business boosted the company's earnings, due to China's continued growth in commerce retail business and strength in the mobile industry. The devaluation of China's currency by the People's Bank of China to offset export problems is another challenge for Alibaba.

Meanwhile, 21 out of the 23 analysts surveyed by TipRanks are bullish on Alibaba. Analysts' prediction on Alibaba's earnings might be lower than what the company may report. Historically, Alibaba tends to beat analysts' estimates for the last four consecutive quarters.