Netease.com Earnings: Here’s Why Shares are Spiking Now

Netease.com Inc. (NASDAQ:NTES) delivered a profit and beat Wall Street’s expectations, AND beat the revenue expectation. The revenue beat is a positive sign to shareholders seeking high growth out of the company. Shares are up 8%.

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Netease.com Inc. Earnings Cheat Sheet

Results: Net income was $161.9 million ($1.23 per diluted share) in the quarter, up from the year-earlier quarter.

Revenue: Increased 10% to $373.5 million from the year-earlier quarter.

Actual vs. Wall St. Expectations: Netease.com Inc. reported adjusted net income of $1.23 per share. By that measure, the company beat the mean analyst estimate of $1.04. It beat the average revenue estimate of $348.11 million.

Quoting Management: William Ding, Chief Executive Officer and Director of NetEase, stated, “2012 marked another strong year for NetEase as we continued to enhance our games and services, as well as introduce new products and services throughout the year. Our 12.1% growth in total revenues was primarily due to an 11.2% increase in our online games business and a 6.9% increase in our advertising services business. We finished the year with a solid fourth quarter, growing our total revenues by 8.3% year-over-year and 13.8% quarter-over-quarter, as well as year-over-year and quarter-over-quarter growth in revenue from our online games business.”

Key Stats (on next page)…

Revenue increased 17.25% from $318.54 million in the previous quarter. Net income increased 25.32% from $129.19 million in the previous quarter.

Looking Forward: Analysts have a more negative outlook for the company’s next-quarter performance. Over the past three months, the average estimate for next quarter’s earnings has fallen from a profit of $1.18 to a profit $1.09. For the current year, the average estimate has moved down from a profit of $4.47 to a profit of $4.23 over the last ninety days.

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(Company fundamentals provided by Xignite Financials.)