NetEase Inc. (NTES) Wednesday posted a higher first-quarter profit as the Chinese online games provider benefited from price increases for its popular Fantasy Westward Journey and Westward Journey Online II games, and on decent patronage for its newer games such as Heroes of Tang Dynasty II and Kung Fu Master. Results topped Wall Street estimates.
"We have built a formidable and growing portfolio of self-developed games that continues to drive our growth," said Chief Executive William Ding.
The Beijing-based company reported quarterly net earnings of 1.1 billion renminbis, or $171 million, up from 941.7 million renminbis last year.
On a per American depositary share, or ADS basis, earnings were $1.32, compared with $1.15 a year ago. On average, 10 analysts polled by Thomson Reuters expected earnings of $1.20 per ADS for the quarter. Analysts' estimates typically exclude special items.
Revenues for the quarter climbed 12.7 percent to 2.3 billion renminbis, or $363.6 million, from 2 billion renminbis in the prior year. Analysts had a consensus revenue estimate of $348.13 million for the quarter.
Online games revenue grew 11.3 percent from last year, and the segment's gross margin improved to 77.8 percent from 73 percent.
Advertising services were up 15.3 percent.
The company sounded optimistic and said the current quarter will be marked by a robust release schedule of new games and expansion packs.
NetEase.com stock closed Wednesday at $60.42, up $0.62 or 1.04%, on a volume of 0.8 million shares on the Nasdaq. In after hours, the stock gained $1.58 or 2.62%, to trade at $62.00.
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