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Lets see if NTES consolidation can fuel a rally – been an amazing run over the past year. A little $TTWO action in order?
NetEase $NTES second-quarter sales and earnings beat Wall Street’s expectations, but shares fell in after-hours trading after the big rip into them – they closed regular session Wednesday up 1.9% to 315.05.
Weibo was also down by as much as 7% at one point during regular trading but rebounded to end the day up more than 1%.
Earnings: NetEase earned an adjusted $3.86 per American depositary share, up 26% from the same period last year, on sales of $1.97 billion, up 48%. Analysts were expecting $3.82 and $1.9 billion.
For Q3 Wall Street modeling NetEase earnings to rise 15% to adjusted $3.56 per U.S. share, with sales jumping 40% to $1.92 billion.
“Our online games, advertising services and e-commerce divisions continue to grow,” NetEase Chief Executive William Ding said in a news release. “While e-commerce is becoming an increasingly important revenue contributor, our self-developed mobile games remain our primary growth engine.”
Stock was down 3% after earnings
Selling intensifying as profit taking and general selling on markets picks up NetEase Inc (ADR) NASDAQ: NTES – Aug 10, 11:19 AM EDT
286.70 -28.35 (- 9.00%)CEO William Ding on the company’s earnings call “Profitability is not a near-term focus” on e-commerce, adding that “our focus is still mainly to grow and market share; we want these two platforms (Kaola and Yanxuan) and our services and products to cover more families and users.”
That got some selling going
CLSA downgrade NTES shares to Underperform
Says slowdown in online games where revenue fell 12% Q/Q and e-commerce’s drag on the company’s margins.
The stock’s not cheap at a 21 P/E ratio, says analyst Man Ho Lam, who has a price target of $340 which is 7.9% upside from yesterday’s close, and now 18.5% upside from today’s lower price.
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