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Alibaba Fiscal Fourth-Quarter Results Miss Street Views Despite Cloud Strength

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Alibaba Fiscal Fourth-Quarter Results Miss Street Views Despite Cloud Strength

Alibaba (BABA) reported lower-than-expected fiscal fourth-quarter earnings on Wednesday, while the Chinese e-commerce giant's revenue trailed market estimates despite double-digit growth in its cloud business.

The company's adjusted earnings fell to 0.62 renminbi ($0.09) per American depositary share for the March quarter from 12.52 renminbi a year earlier. The consensus on FactSet was for 6.14 renminbi. Revenue rose 3% to 243.38 billion renminbi, but missed the Street's view for 246.97 billion renminbi.

Alibaba's New York Stock Exchange-listed shares declined 2.3% in the most recent premarket activity.

Revenue in the cloud intelligence business jumped 38% to 41.63 billion renminbi, with artificial intelligence-related product revenue delivering triple-digit growth for the eleventh consecutive quarter, Chief Financial Officer Toby Xu said in a statement. External revenue growth accelerated to 40%, with AI-related products accounting for 30% of the amount, according to Chief Executive Eddie Wu.

Sales in the China e-commerce segment grew 6% to 122.22 billion renminbi. Within this division, e-commerce fell 1% to 96.29 billion renminbi. China commerce wholesale sales increased 3% to 5.94 billion renminbi.

"China e-commerce customer management revenue grew 8% on a like-for-like basis," Xu said. "The unit economics and average order value of quick commerce steadily improved."

The international digital commerce business advanced 6% to about 35.43 billion renminbi, buoyed by gains in retail and wholesale. The all others segment, which includes Cainiao, Amap and Hujing digital media and entertainment, fell 21% to 65.46 billion renminbi, due to the disposal of the Sun Art and Intime businesses, the company said.

"We are confident in our business outlook and will continue to invest in AI (plus) cloud to strengthen our competitive advantages," according to Xu.

On Tuesday, Chinese e-commerce group JD.com (JD) recorded better-than-expected first-quarter results. In April, technology giant Amazon.com (AMZN) reported first-quarter results above Wall Street's estimates and issued a robust revenue outlook for the ongoing three-month period.

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