NetEase misses second-quarter profit forecasts; shares slide
NetEase's shares plummeted over 5% in early U.S. trading Thursday following a gaming and media company's earnings report that fell far short of analyst expectations. The company's net profit per share was RMB12.02, significantly below the estimated RMB15.54. Despite this, revenue increased 7.9% year-over-year to RMB30.11 billion, surpassing the RMB29.48 billion consensus estimate.
The core business, games and related services, contributed RMB25.0 billion in net revenue, up 9.7% year-over-year. Youdao's revenue grew 3.5% to RMB1.5 billion, while NetEase Cloud Music remained relatively stable at RMB2.0 billion. However, revenue from innovative businesses and other operations fell 3.5% to RMB1.6 billion. The increase in total operating expenses to RMB9.1 billion was attributed to higher marketing, staff-related, and research and development spending, with the year-over-year rise primarily driven by increased R&D expenditure.
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