Top Chinese online games firm NetEase reported "better than expected" second-quarter results, but gave a flat forecast for its core online game business in this quarter.
Beijing-based NetEase said its revenue in the past quarter was US$72 million, 8.6 per cent up on the first quarter and a year-on-year rise of 38 per cent. Meanwhile, the net profit of NASDAQ-listed NetEase reached US$39.3 million or 28 US cents per diluted American depository share, a year-on-year increase of 29 per cent.
"We experienced another quarter of solid revenue growth driven by sequential growth in all business lines," said Ding Lei, CEO and controlling director of NetEase. A Shanghai-based Internet industry analyst, who wished to remain anonymous, said that the results were "better" than his expectations.
According to a poll by US firm Thomson Financial, analysts expected NetEase's earnings per share to be 27 US cents and its revenue to be US$68.5 million. The online gaming business of NetEase, the biggest in China, grew almost 8 per cent quarter-on-quarter to US$60.80 million.
Its advertising business grew 11.7 per cent to US$8.6 million, while wireless and other revenue also rose 16 per cent to US$2.6 million. However, NetEase, whose profit margin on its game business rose 90.7 per cent in the quarter due to its strong in-house game development capability, also saw its research and development expenses rise 50 per cent quarter-on-quarter to US$5.79 million. Despite its good second-quarter results, the company's shares fell 2 per cent in the after-hours NASDAQ trading to US$18.30.
This was mainly a result of the "very conservative" forecast offered by Chief Operating Officer Michael Tong about the performance of its online gaming business in the third quarter, which is expected to either rise or fall 1 per cent from this quarter's US$60.80 million.
Tong attributed this to the fact that many gamers were glued to their TVs during the FIFA World Cup in June and July and complaints about the alleged pro-Japanese nature of some of NetEase's games. Tong said that both of these were one-off problems.
Source:佚名