On Nov. 6, NetEase.com (NASDAQ:NTES) released third-quarter earnings for the period ended Sept. 30.

  • To get the full story about this Chinese gaming site and portal, click here.

  • 21.2% growth in advertising revenue stemmed mostly from improved content; utilization of new products and services helped drive a 32% increase in total revenue.

  • Of the 104 players that have rated three-star NetEase in CAPS, 97 of them gave the stock the green light.

(Figures in thousands, except per-share data)

Income Statement Highlights

Q3 2006

Q3 2005

Change

Sales

$72,356.1

$54809.2

32%

Net Profit

$39,825.4

$31,967.9

24.6%

Earnings Per ADS

$0.29

$0.22*

31.8%

Diluted Shares*

139,416.5

145,300

(4%)

*data provided by Capital IQ

Get back to basics with a look at the income statement.

Margin Checkup

Q3 2006

Q3 2005

Change*

Gross Margin

81.7%

84.3%

(2.6)

Operating Margin

57.7%

59.7%

(2.0)

Net Margin

57.4%

55.9%

1.5

*Expressed in percentage points

Margins are the earnings engine. See how they work.

Balance Sheet Highlights

Assets

Q3 2006

Q3 2005

Change

Cash + ST Invest.*

$478,725.8

$392,403.9

22%

Accounts Rec.

$14,901.2

$9,287.6

60.4%

*Short term investments are represented by Time deposits.

Liabilities

Q3 2006

Q3 2005

Change

Accounts Payable

$4,540.9

$15,964.8

(71.6%)

Long-Term Debt

$101,419.4

$101,432.7

(0%)



Learn the ways of the balance sheet.

Cash Flow Highlights

Q3 2006

Q3 2005

Change

Cash From Ops.

$43,579.4

$52,511.7

(17%)

Capital Expenditures

$6,645.9

$3,949.3

68.3%

Free Cash Flow

$36,933.5

$48,562.4

(23.9%)



Find out why Fools always follow the money.

Related Companies:

  • Sina (NASDAQ:SINA)
  • Sohu.com (NASDAQ:SOHU)
  • Baidu.com (NASDAQ:BIDU)

Related Foolishness:

NetEase.com is a Motley Fool Rule Breakers recommendation, and Sina is a Motley Fool Stock Advisor pick. To find out why, try a free 30 day trial of either newsletter (or both!)

Fool by Numbers is designed to give you the raw earnings information in a timely fashion, putting all the numbers you need in one easy-to-read place. But at The Motley Fool, we believe numbers tell only part of the story, so check Fool.com for more of our in-depth discussion of what the numbers mean. This data has been provided by Netscribes. To provide feedback on this article, please click on the "feedback" button below.