NetEase (NTES) reported Q4 profit of $2.66 per ADS on an adjusted basis. Revenue increased 36% year-over-year to $2.89 billion. The stock went up about 2% after the earnings announcement on Nasdaq during the extended trading hours on Wednesday.
NetEase reported GAAP earnings of $1.92 per ADS for the recently ended quarter compared to $1.41 in the prior-year quarter.
Operating expenses rose 25% year-over-year to $787.2 million, mainly due to increased staff-related costs, research and development investments, and shipping and handling costs.
“Throughout the year we also made a number of advancements to better position us on the world’s stage, most notably in Japan. Our world-class R&D capabilities, particularly in the mobile arena, afford us an exciting opportunity to appeal to a global audience. We plan to continue to invest in global talent, IP and collaboration with other elite game developers worldwide to further this momentum,” said CEO William Ding,
Apart from focusing on online games, the company sees huge potential in e-commerce, music and online education and plans to focus on these areas in 2019.
The Board of Directors has approved a dividend of $0.48 per ADS for the fourth quarter of 2018, which is expected to be paid on March 15, 2019, to shareholders of record as of March 8, 2019.
Reports said that NetEase’s subsidiary Kaola and Amazon’s (AMZN) Chinese unit are discussing a possible merger. However, both companies have not commented on this regard so far. Investors will keenly look at how the management responds to any questions about this proposed merger during the earnings conference call.
NetEase stock had dropped 1% since the beginning of this year and 25% in the past 12 months.
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