China’s online game maker NetEase, Inc. (NASDAQ:NTES) on Tuesday announced a new share repurchase program to buy back up to $1 billion worth of the company’s outstanding shares. Under the term, the company will repurchase the company’s outstanding American Depositary Shares (ADSs) for a period not exceed 12 months. The company funds the buyback with available working capital. The extent of repurchases also depend on a variety of factors, including market conditions, regulatory requirements and other corporate considerations.
NetEase shares jumped 5 percent to $228.84 in New York. NetEase is one of leading internet technology companies in China. It develops PC-client and mobile games. It also provides advertising services, e-mail services, music services and e-commerce platforms.
The repurchase program shows management’s confidence in the company’s prospects despite the disappointing third-quarter sales. The Beijing-based company said third-quarter revenue rose 38 percent to $1.38 billion, missing analyst’s estimates of $1.43 billion. Online game service accounted for most of the revenue, increasing 26 percent to 6.57 billion yuan. Sales of advertising rose 23.8 percent to 563.3 million yuan. Sales of E-mail, e-commerce and others service jumped 107.2 percent to 2.08 billion yuan.
"Ingenuity, quality and diversification have provided the cornerstones for our competitive edge. As the internet technology industry expands, we will keep pushing the boundaries with new and improved products. Our latest endeavors for our online game services include enhancing interactive communications among our mobile users, establishing virtual and augmented reality interfaces, as well as exploring other innovative gameplay options that offer exciting advances in how players experience and connect with our games." said Mr. William Ding, Chief Executive Officer and Director of NetEase.