NetEase.com Q2 Results Top Estimates

(RTTNews) - NetEase.com, Inc. (NTES), a China-based provider of online game and web advertising services, reported Wednesday a profit for the second quarter that increased from last year, reflecting double-digit revenue growth. Both earnings per share and quarterly revenues topped analysts' expectations.

"The advancements we are making across our online and mobile games, advertising services and e-commerce businesses support our dynamic growth. Each of our three business segments grew both sequentially and year-over-year in the second quarter with total revenue increasing by 17.2% sequentially and 22.3% year-over-year," CEO William Ding said is a statement.

The Beijing, China-based company reported net income of 1.20 billion yuan or $193.8 million for the second quarter, higher than 1.10 billion yuan in the prior-year quarter.

On a per share basis, earnings per share grew to 0.37 yuan or $0.06 from last year's 0.34 yuan. Earnings per American depositary share increased to 9.18 yuan or $1.48 from last year's 8.41 yuan or $1.36.

On average, eight analysts polled by Thomson Reuters expected the company to report earnings of $1.46 per share for the quarter. Analysts' estimates typically exclude special items.

The latest quarter's results include a net foreign exchange loss of 20.2 million yuan, compared to foreign exchange gain of 5.6 million yuan in the same period last year.

Total revenues for the quarter increased 22.3 percent to 2.95 billion yuan or $475.85 million from 2.41 billion yuan in the same quarter last year, and topped ten Wall Street analysts' consensus estimate of $426.64 million.

Online game services revenue revenue grew 13.1 percent from last year to 2.34 billion yuan or $376.6 million, and advertising services revenue increased 42.9 percent to 389.10 million yuan or $62.7 million, while E-mail, e-commerce and other revenue improved tripled to 226.35 million yuan or $36.5 million from last year.

Gross profit for the quarter increased to 2.0 billion yuan or $322.3 million from 1.70 billion yuan, reflecting double-digit increases in revenues from both the online games and advertising services businesses.

The company said its board of directors approved a $0.03 increase in dividend to $0.37 per ADS for the second quarter, payable on September 5 to shareholders of record on August 29, 2014.

"In conclusion, we plan to continue to foster our growth both organically and by exploring overseas licensing and expansion opportunities that fuel our traditional online and mobile games and other service offerings," Ding added.

NTES closed Wednesday's regular trading session at $84.06, up $1.41 or 1.71% on a volume of 0.64 million shares.