NetEase Inc. (NASDAQ: NTES) reported a 46% jump in earnings for the second quarter of 2019 as gaming and e-commerce segments drove revenues higher. The bottom line exceeded analysts’ expectations while the top line missed consensus estimates.
Net income climbed by 46% to $448.4 million or $3.44 per American Depository Share (ADS). Adjusted earnings were $4.09 per ADS, up 35% from last year. During the latest quarter, the company incurred lesser foreign exchange gain due to unrealized exchange gains and losses arising from its US dollar-denominated bank deposits and short-term loan balances.
Revenues increased by 15% year-over-year to $2.73 billion. Online game services revenue jumped by 14% and e-commerce revenue climbed by 20%. Innovative businesses and other revenues grew by 23.2% while advertising services revenues fell by 8.3%.
Also read: CyberArk Software Q2 earnings review
Online game services revenues continued to grow steadily with the support of a diversified portfolio and impressive performances from all of the company’s leading titles. Net revenue from mobile games accounted for about 72.2% of revenues from online game services for the second quarter, down from 74.7% a year ago.
For the second quarter, online game services showed an increase in gross profit backed by mobile games such as Life-After, as well as certain PC-client games such as Justice and Fantasy Westward Journey Online. E-commerce gross profit increased driven by sales volume of Kaola and Yanxuan, as well as continuously improved procurement and operation processes.
For the quarter, the advertising services segment experienced a decrease in revenue contribution based on evolving competitive macro-environment, and increased expenses related to staff and content purchases. Despite this, the top performing advertising verticals were real estate, automobile, and internet services sectors.
Also read: Lyft Q2 earnings review
Further, Netease’s board of directors has approved a dividend of $1.04 per ADS for the second quarter, which is expected to be paid on August 30, 2019, to shareholders of record as on August 23, 2019.
The company paid a dividend of $0.69 per ADS for the first quarter of 2019 on June 7. The board determined that, starting in the second quarter of 2019, quarterly dividends will be set at an amount equivalent to about 20% to 30% of its anticipated net income after tax in each fiscal quarter.
Shares of NetEase ended Wednesday’s regular session up 1.50% at $215.87 on the Nasdaq. Following the earnings release, the stock gained over 2% in the after-market session.
Shares of Hormel Foods Corporation (NYSE: HRL) were down over 1% on Monday. The stock has dropped 29% year-to-date. The food company is set to report its fourth quarter 2023 earnings
The Kroger Co. (NYSE: KR), a leading grocery retailer that operates both in-store and online, will be reporting earnings this week. The company, which is preparing to acquire rival retailer
Salesforce, Inc. (NYSE: CRM) achieved accelerated sales growth and profitability in recent quarters, in line with its transformation goal. The customer relationship management platform bets on new opportunities in generative