NetEase Stock Slumps After First Quarter Miss
Dou Shicong
DATE:  May 18 2018
/ SOURCE:  Yicai
NetEase Stock Slumps After First Quarter Miss NetEase Stock Slumps After First Quarter Miss

(Yicai Global) May 18 -- NetEase Inc. stock has slumped nearly 7.5 percent after the gaming company failed to live up to hype in the first quarter and missed out on earnings forecasts.

The Beijing-based firm's share price [NASDAQ:NTES] closed at USD246.16 yesterday after opening 9.4 percent down.

NetEase reported earnings per share of USD0.91 for the period, less than half Nasdaq's consensus forecast of USD1.99 and a stark contrast with lead rival Tencent Holdings Ltd., which shattered expectations to post record first quarter gains.

The company managed to increase revenue 3.9 percent to USD2.26 billion. But income from its core business slipped 18.4 percent to USD1.4 billion and was the primary reason profit land slid 69 percent to USD120 million.

Gaming makes up nearly 62 percent of the firm's overall revenue, with mobile making up 71.8 percent of all gaming. The segment has seen heightened competition over the past year and games like NetEase's Onmyoji have struggled to remain popular. Increased opposition even saw growth in Tencent's gaming revenue fall to 26 percent from 34 percent a year earlier, despite the company posting an overall 61 percent profit gain in the quarter.

In other business, the company's e-commerce unit managed to double its contribution to total revenue, posting income of USD595 million after beginning to report its performance separate from the rest of the company from the previous quarter. The company also saw growth in its online music and advertising turnover.

Editor: James Boynton

Follow Yicai Global on
Keywords:   Netease,TENCENT,Mobile Games,E-COMMERCE