Chinese Web portal
reported a 147% increase in second-quarter profit Tuesday, fueled by revenue growth in its online games.
The Beijing company earned $29.3 million, or 83 cents an American depositary share, in the quarter, compared with $11.9 million, or about 36 cents a share, last year. Revenue rose 90.2% from a year ago to $50.4 million. Analysts had been forecasting earnings of 66 cents an ADS on sales of $44.3 million.
NetEase is one of a handful of Chinese Internet portals that have turned to online games to offset sagging revenue in other businesses such as wireless services and advertising. The stocks, which include
, are aggressively traded in the U.S. and sport relatively rich earnings multiples despite signs of slowing growth.
At its Tuesday close of $59.70, NetEase fetched 24 times next year's earnings estimate after doubling in about a year.
NetEase said revenue from online game services rose 146.5% from a year ago to $41.5 million, driven by solid growth in its
Fantasy Westward Journey
Westward Journey Online II
titles. Advertising revenue jumped 30.8% from a year ago to $6.5 million.
"We have experienced superior growth in the first half of 2005, and we believe that we are well-positioned to capture more market share as the online gaming community becomes larger and more sophisticated," the company said.
The stock added $8.22, or 13.8%, to $67.92 after hours.