Join +750K new investors every month who copy stock picks from billionaire's portfoliosSign Up Free

NetEase Shares Slide on Q1 Results Miss

Published 23/05/2024, 09:40
© Reuters.
NTES
-

HANGZHOU, China - NetEase, Inc. (NASDAQ: NASDAQ:NTES), a prominent internet and game services provider, disclosed its financial outcomes for the first quarter of 2024, revealing a shortfall in earnings per share (EPS) and a slight revenue miss compared to analyst expectations.

The company reported a non-GAAP EPS of RMB10.37, falling short of the consensus estimate of RMB12.59. Revenue for the quarter was RMB26.85 billion, just below the analyst forecast of RMB26.97 billion.

The market response was decidedly negative, with NetEase shares dropping 4% following the announcement. This decline indicates investor disappointment as the company's financial performance did not meet the market's expectations.

In the first quarter, NetEase saw its net revenues increase by 7.2% to RMB26.9 billion (US$3.7 billion) compared to the same period last year, driven by growth across its key business segments.

The company's games and related value-added services net revenues grew by 7.0%, reaching RMB21.5 billion (US$3.0 billion).

Youdao (NYSE:DAO), the company's intelligent learning subsidiary, experienced a significant revenue increase of 19.7%, while Cloud Music's net revenues rose by 3.6%.

Despite the revenue growth, NetEase's total operating expenses surged by 22.4% to RMB9.4 billion (US$1.3 billion), impacting the company's profitability. The increase in expenses was attributed to higher marketing expenditures and staff-related costs.

Mr. William Ding, Chief Executive Officer and Director of NetEase, commented on the results, highlighting the sustained success of the company's established game franchises and its expansion into new genres. "

With a portfolio featuring premium-quality games and more diversification across genres, we are well-positioned to extend our exciting gaming experiences to audiences around the globe," said Mr. Ding.

He also emphasized the strong performance of Cloud Music and Youdao, stating, "Our focus in 2024 remains on crafting products and content that ignite the market with passion and deliver vibrant experiences, ultimately creating value for both our users and our Company."

NetEase's financial report also included details on its share repurchase program, with approximately 8.9 million ADSs repurchased for a total cost of US$811.0 million as of March 31, 2024.

Investors will be closely monitoring the company's strategic moves and operational efficiency in the coming quarters as NetEase navigates through the competitive landscape and strives to meet market expectations.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.