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NetEase third quarter revenue of $1 billion 900 million, an increase of 35.5%

via:博客园     time:2017/11/16 9:26:51     readed:466

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NetEase (NASDAQ: NTES) issued its unaudited third quarter earnings for the year ended September 30, 2017 on Wednesday. Results showed that NetEase in the third quarter net revenues of 12 billion 500 million yuan ($1 billion 900 million), representing an increase of 35.5%; net profit attributable to shareholders of the NetEase for 2 billion 500 million yuan ($379 million 900 thousand), compared with the previous year's 2 billion 700 million yuan fell 8%.

NetEase adjusted 3.43 dollars per ADS after the third quarter adjustment, and the market expected to be $3.26.

Third quarter gross profit of $893 million 900 thousand, an increase of 11.5%.

Third quarter online game sales of 8 billion 111 million 700 thousand yuan (equivalent to 1 billion 219 million 200 thousand U.S. dollars), the same period in 2016 6 billion 568 million yuan.

NetEase shares rose 0.84% in the u.s..

Major performance in the third quarter:

- NetEase's third quarter net revenue was 12 billion 500 million yuan (about $1 billion 900 million), representing an increase of 35.5% over the same period last year.

- NetEase's third quarter net game revenue was 8 billion 111 million 700 thousand yuan (about 1 billion 219 million 200 thousand U.S. dollars), representing an increase of 23.5% over the same period last year.

- NetEase's third quarter net revenue of advertising services was RMB 631 million 400 thousand yuan (about 94 million 900 thousand US dollars), an increase of 12.1% compared with the same period last year.

- NetEase's third quarter mail, electricity providers and other services net revenues of 3 billion 734 million 700 thousand yuan (about 561 million 300 thousand U.S. dollars), representing an increase of 79.5% over the same period last year.

The gross profit of NetEase in the third quarter was RMB 5 billion 900 million yuan (US $893 million 900 thousand), an increase of 11.5% compared with the same period last year.

NetEase's total operating expenses in the third quarter was RMB 3 billion 400 million yuan (about 510 million 700 thousand US dollars), representing an increase of 36.6% over the same period last year.

In the third quarter, the net profit attributable to shareholders of NetEase was RMB 2 billion 500 million yuan (about 379 million 900 thousand US dollars), down 8% compared with the same period last year. Without GAAP, the net profit attributable to NetEase shareholders in the third quarter was RMB 3 billion yuan (US $454 million 600 thousand).

- NetEase's diluted earnings per share of us depositary receipts in the third quarter was $2.86; in accordance with GAAP, the diluted earnings per share of us depositary receipts in the third quarter was $3.43.

Ding Lei also said:

Third quarter performance analysis:

Net revenue

NetEase's third quarter net revenue was RMB 12 billion 477 million 800 thousand yuan (about 1 billion 875 million 400 thousand US dollars), lower than the previous quarter's RMB 13 billion 376 million, higher than the same period last year's RMB 9 billion 211 million 600 thousand yuan.

NetEase's third quarter net game revenue was 8 billion 111 million 700 thousand yuan (about 1 billion 219 million 200 thousand U.S. dollars), lower than the previous quarter's RMB 9 billion 430 million 200 thousand yuan, higher than the same period last year's RMB 6 billion 568 million yuan. In the third quarter, hand travel revenue accounted for 68.3% of NetEase online game revenue, lower than the previous quarter of 72.4%, higher than the same period last year 57.2%.

NetEase's third quarter advertising service net revenue was RMB 631 million 400 thousand yuan (about 94 million 900 thousand U.S. dollars), higher than the previous quarter's RMB 595 million 600 thousand yuan, higher than the same period last year's RMB 563 million 300 thousand yuan. The third quarter of the best advertising revenue industry: car, real estate and Internet services.

NetEase's third quarter mail, electricity providers and other business net revenue of RMB 3 billion 734 million 700 thousand yuan (about 561 million 300 thousand U.S. dollars), higher than the previous quarter's RMB 3 billion 350 million 300 thousand yuan, higher than the same period last year, 2 billion 80 million 400 thousand yuan.

Gross profit

The gross profit of NetEase in the third quarter was RMB 5 billion 947 million 600 thousand yuan (about 893 million 900 thousand US dollars), the last quarter and the same period last year were RMB 6 billion 736 million 900 thousand yuan and RMB 5 billion 333 million 600 thousand yuan respectively.

NetEase in the third quarter online game service gross profit growth year-on-year, mainly due to the Mobile Games revenue contribution, such as "Yin and Yang", "ghost story", "Mobile Games," light "," magic "and all this land Zhen song" Mobile Games, as well as the classic game "dream swims on the west" the computer version of the revenue contribution. Online game gross margin decline is mainly due to hand travel revenue contribution decline. Gross profit margin was 62.5%, compared with 63.1% in the previous quarter and 65% in the same period last year. Online games service gross profit rate fell year by year mainly due to the lower gross profit margin of hand travel income in the proportion of total revenue in the game.

NetEase's third quarter advertising service margin year-on-year growth and growth, mainly due to its commercialization progress. NetEase's third quarter advertising service gross profit margin was 68%, the last quarter and last year were 67.6% and 65.3%. The rise in the gross profit margin of advertising services is mainly due to the commercialization.

NetEase's third quarter mail, electricity providers and other business gross profit fell year by year, mainly due to NetEase koala and NetEase strict selection and other low gross profit margin of the electricity supplier business in the mailbox, electricity providers and other business revenue accounted for the rise in proportion. Gross profit margin was 11.9%, compared with 11.3% in the previous quarter and 33.5% in the same period last year. The decline in the gross profit margin of mailbox, electricity supplier and other businesses was mainly due to the rise in the proportion of total revenue in the mailbox, electricity supplier and other business due to the relatively low gross profit margin of NetEase, koala and NetEase.

NetEase's two quarter mail, electricity providers and other business gross profit fell year on year, mainly due to some of NetEase's gross profit margin relatively high electricity supplier business income decline.

Gross profit margin

NetEase third quarter online game service gross profit margin was 62.5%, the last quarter was 63.1%, the same period last year was 65%. Online games service gross profit rate fell year by year mainly due to the relatively low gross profit margin of hand travel income in the proportion of total revenue in the game.

NetEase third quarter advertising service gross profit margin was 68%, the last quarter was 67.6%, the same period last year was 65.3%. The year-on-year rise in gross profit margin of advertising services is mainly due to the strengthening of the monetization ability of advertising services by NetEase.

NetEase's third quarter mail, electricity providers and other business gross profit margin was 11.9%, the last quarter was 11.3%, the same period last year was 33.5%. Mail, electricity providers and other business gross profit margins fell year on year, mainly due to lower gross margins of Koala purchase, NetEase, such as strict selection of electricity supplier business revenue increased, leading to a decline in overall gross profit margins.

Operating expenditure

NetEase's total operating expenses in the third quarter was RMB 3 billion 397 million 900 thousand yuan (about 510 million 700 thousand US dollars), higher than the previous quarter's RMB 3 billion 331 million 500 thousand yuan, higher than the same period last year's RMB 2 billion 487 million yuan. Operating expenses increased, mainly due to the number of employees and average salary increase personnel costs, increase marketing costs, increase business and NetEase operating expenses; operating expenses increased, mainly due to higher personnel costs and increased R & D investment, and was partially offset by the reduction in marketing costs.

Income tax benefits

The net income tax of NetEase in the third quarter was RMB 225 million 500 thousand yuan (about 33 million 900 thousand US dollars), the last quarter was RMB 703 million 500 thousand yuan, and the same period last year was RMB 427 million 200 thousand yuan. NetEase's effective tax rate was 8.1% in the third quarter, 19% in the previous quarter, and 13.3% in the same period last year.

Net profit after tax

The net profit attributable to shareholders of NetEase in the third quarter was RMB 2 billion 500 million yuan (about 379 million 900 thousand US dollars), which was lower than that of RMB 2 billion 700 million yuan in the same period of last year, which was lower than the RMB 3 billion yuan in the previous quarter. In accordance with GAAP, the net profit attributable to NetEase shareholders in the third quarter was RMB 3 billion yuan (about 454 million 600 thousand US dollars), lower than the previous quarter's RMB 3 billion 500 million yuan, unchanged from the same period last year.

The diluted earnings per share of NetEase in the third quarter was $2.86, down from $3.37 in the previous quarter, higher than $3.12 in the same period last year. Not in accordance with GAAP, NetEase's third quarter earnings per share of us depositary receipts was $3.43, lower than the previous quarter's $3.94, unchanged from the same period last year.

Quarterly dividend

The NetEase board of directors has authorized US $0.72 dividend per share of us depositary receipts in the third quarter. The dividend registration date is December 1, 2017, and the dividend payment date is December 8, 2017. NetEase paid $1.08 per share of us depository receipts in June 2, 2017, and $0.83 per share of us depository receipts in September 1, 2017.

According to the quarterly dividend payout policy announced by NetEase in May 13, 2014, the quarterly dividend is equal to about 25% of the net profit per quarter after tax.

Other information

As of September 30, 2017, NetEase held cash and cash equivalents, term deposits and short-term investments totaling RMB 40 billion 700 million yuan (about 6 billion 100 million US dollars), as of December 31, 2016 was RMB 36 billion 933 million yuan. The net cash inflow from NetEase in the third quarter of 2017 was about RMB 1 billion 700 million yuan (about 248 million 800 thousand US dollars), the last quarter was RMB 2 billion 300 million yuan, and the same period last year was RMB 3 billion 700 million yuan.

stock repurchase

In November 15, 2016, the NetEase Board approved the company to buy back $1 billion in most of the American depositary receipts in no more than 12 months. As of November 14, 2017, NetEase had repurchased about 1 million 100 thousand shares of us depositary receipts, costing about $306 million 100 thousand.

NetEase also announced on Wednesday that the company's board of directors has bought back up to $1 billion of us depositary receipts in less than 12 months through a new stock repurchase program. The starting date of the buyback project is November 16, 2017. NetEase plans to buy shares through operating capital. NetEase may repurchase publicly issued vouchers in the Nasdaq stock market in the open transaction.

Market expectation and stock price performance

Not in accordance with GAAP, NetEase diluted earnings per share of US $3.43 per share in the third quarter was $; net revenue was RMB 12 billion 477 million 800 thousand yuan (US $1 billion 875 million 400 thousand). NetEase's third quarter net profit was better than market expectations, but revenue was slightly lower than expected. Thomson Reuters survey showed that market analysts had expected the average, not in accordance with GAAP, NetEase third quarter earnings per share of U.S. depositary receipts of $2.77, revenue of $1 billion 890 million.

NetEase shares rose $3.91 on Wednesday in the Nasdaq stock market, or 1.31%, to $302.47. At press time, NetEase shares rose 5.03 dollars in after hours trading, or 1.66%, the stock price of $307.50. In the past 52 weeks, NetEase's lowest price was $211.11, and the highest stock price was $337.55. According to Wednesday's closing price, NetEase has a market capitalization of about $39 billion 700 million.

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