NetEase Shares Sink After 2Q Report

SAN FRANCISCO (AP) — U.S.-traded shares of NetEase.com Inc. fell Thursday after the Chinese online gaming company reported second-quarter results ahead of analyst expectations but indicated a boost came from the recognition of revenue related to the cleanup of dormant user accounts.

American Depositary Shares of NetEase fell $5.72, or 12.3 percent, to $40.93 in afternoon trading.

Beijing-based NetEase said late Wednesday its profit for the quarter that ended June 30 rose 7 percent to 468.1 million RMB ($68.5 million), or 3.60 RMB (53 cents) per American Depositary Share. This compares with 438.2 million RMB, or 3.39 RMB per share, in the year-ago quarter.

Revenue climbed 22 percent to 872.1 million RMB ($127.7 million), from 715.9 million RMB in the year-ago quarter.

Analysts polled by Thomson Reuters were expecting a profit of 45 cents per share on $120.3 million in revenue.

Revenue from online games climbed to 781.5 million RMB ($114.4 million), from 595 million RMB, while revenue from advertising services fell to 72.8 million RMB ($10.7 million) from 103.9 million RMB, last year.