Alibaba Group Holding Ltd. will announce its earnings for the fiscal fourth quarter ended March 31 on Thursday before the U.S. market opens. The Chinese e-commerce giant is expected to post slower revenue growth from the previous quarter, in part because China’s Lunar New Year holiday makes the beginning of the calendar year a traditionally slow period. Analysts and investors will also be watching for any impact from recent changes in the company’s policies to select merchants more stringently and to fight counterfeits.

EARNINGS FORECAST: Alibaba is expected post net income of 3.28 billion yuan ($532 million) in the quarter ended in March, down 40% from the same period a year ago, under U.S. generally accepted accounting principles, according to 18 analysts surveyed by S&P Capital IQ. Analysts attribute the expected decline largely to Alibaba’s spending on stock awards for employees and executives. Non-GAAP net profit, which excludes that sort of expenditure, is forecast at 7.45 billion yuan, according to the survey.

REVENUE FORECAST:  Forecasters estimate revenue rose about 40% to 16.9 billion yuan from 12 billion yuan a year earlier, though it likely fell 35% from the previous quarter, according to 28 analysts surveyed by S&P Capital IQ. In addition to the holiday effect, some analysts also say Alibaba’s efforts to fight fraudulent merchant behavior by imposing stricter rules on vendor selection could drag down growth in the value of transactions on its platforms.
MARGINS: Gross profit margin in the March quarter is expected to slip to 66.8% from 71.2% a year earlier and 71.3% in the quarter that ended in December, according to analysts’ estimates.