HANGZHOU, China - NetEase Inc. (NASDAQ:NTES) reported second-quarter earnings that beat analyst expectations, but revenue fell short of estimates, sending shares down sharply in Thursday trading.
The Chinese internet and gaming company posted adjusted earnings per share of RMB12.15 ($1.67), topping the consensus forecast of RMB11.97. However, revenue of RMB25.49 billion ($3.51 billion) missed analyst projections of RMB26.11 billion.
NetEase shares fell 5.75% following the results, as investors focused on the revenue miss despite the earnings beat.
The company's core games and related value-added services segment saw revenue rise 6.7% year-over-year to RMB20.06 billion ($2.76 billion). However, this was down sequentially from RMB21.46 billion in the first quarter.
"The robust R&D and operating capabilities we've built over the past two decades have shaped our formidable games portfolio of time-honored titles and newer innovative hits that redefine genres and diversify our offerings," said CEO William Ding in a statement.
NetEase's Youdao (NYSE:DAO) education technology unit posted a 9.5% revenue increase to RMB1.32 billion ($181.9 million). The Cloud Music streaming division grew revenue 4.7% to RMB2.04 billion ($280.8 million).
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