Investing.com - Alibaba (NYSE:BABA) has reported a jump in adjusted core income in the fourth quarter as solid demand for artificial intelligence bolstered its cloud business, but changes on the Chinese e-commerce giant’s logistics division weighed on revenues.
The group has previously targeted heavy investments in its cloud computing and AI infrastructure over the next three years in a bid to build out its capabilities with the nascent technology.
Quarterly revenue at its cloud intelligence division increased by 18% year-over-year to 30.13 billion yuan ($4.15 billion). Bloomberg consensus estimates had seen the figure at 29.9 billion yuan.
"[W]e will remain focused on our core businesses and continue to drive AI [and] cloud as a new engine for our long-term growth," said CEO Eddie Wu in a statement.
But an effort to integrate its logistics offerings into its e-commerce businesses fueled weakness at its Cainiao unit, where revenue decreased by 12% to 21.57 billion yuan ($2.97 billion).
Direct sales at its Chinese commerce retail business also declined, driven by a planned reduction of "certain direct sales businesses", Alibaba said.
The results come as China’s government has been pushing out stimulus measures aimed at revitalizing consumer spending and propping up an ailing property sector.
Group-wide, revenue ticked up by 7% to 236.45 billion yuan ($32.58 billion), compared with projections of 237.91 billion yuan.
U.S.-listed shares in Alibaba were lower in premarket trading on Thursday.
In the quarter ended on March 31, adjusted earnings before interest, taxes, depreciation and amortization surged by 36% versus a year ago to 41.78 billion yuan ($5.76 billion). Analysts had anticipated 41.23 billion yuan, according to Bloomberg expectations.