The 10-second takeaway
For the quarter ended March 31 (Q1), NetEase met expectations on revenues and beat expectations on earnings per share.
Compared to the prior-year quarter, revenue increased. GAAP earnings per share increased significantly.
Margins grew across the board.
NetEase recorded revenue of $350.0 million. The six analysts polled by S&P Capital IQ anticipated revenue of $349.7 million on the same basis. GAAP reported sales were 11% higher than the prior-year quarter's $312.0 million.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.
EPS came in at $1.32. The eight earnings estimates compiled by S&P Capital IQ predicted $1.23 per share. GAAP EPS of $1.32 for Q1 were 16% higher than the prior-year quarter's $1.14 per share.
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.
For the quarter, gross margin was 71.8%, 410 basis points better than the prior-year quarter. Operating margin was 50.7%, 110 basis points better than the prior-year quarter. Net margin was 49.4%, 150 basis points better than the prior-year quarter. (Margins calculated in GAAP terms.)
Next quarter's average estimate for revenue is $360.1 million. On the bottom line, the average EPS estimate is $1.31.
Next year's average estimate for revenue is $1.56 billion. The average EPS estimate is $5.43.
The stock has a four-star rating (out of five) at Motley Fool CAPS, with 1,117 members out of 1,155 rating the stock outperform, and 38 members rating it underperform. Among 279 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 272 give NetEase a green thumbs-up, and seven give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on NetEase is outperform, with an average price target of $61.60.
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