The Chinese online gaming and internet giant NetEase, Inc. (NASDAQ:NTES) posted better-than-expected on Monday due to strong growth in its mobile games segment, sending its shares to a new all-time high.
For fiscal 2016, net revenue rose 67.4 percent to 38.2 billion yuan ($5.5 billion), while gross profit for 2016 rose 61.6 percent to 21.7 billion yuan ($3.1 billion). For the fourth quarter, the company posted earning of $4.40 per ADR on revenue of $1.74 billion, crushing analysts estimates of $3.44 per ADR on $1.58 billion revenue.
The strong result was led by robust growth in its flagship mobile games segment. Revenue from online games jumped 63 percent to $1.24 billion in the fourth quarter, accounting 74 percent of its total revenue. The company launched 40 new mobile games in 2016. One of the hottest games is Onmyoji, which was named one of the top 10 outstanding games in 2016 in China's iOS app store. Onmyoji’s success in China makes the company to roll it out into more countries later this year, including Japan, Canada, Europe and the United States.
Beside developing games in house, the company also partnered with Activision Blizzard to roll out games in China, including World of Warcraft and Overwatch. The company now is working to bring both PC and mobile versions of Minecraft to Chinese players.
What’s more, the company announced to increase dividend to $1.01 per ADS from $0.73 per ADS. On November 15, 2016, the company also approved a new share repurchase program of up to $1.0 billion.
However, the company’s gross profit margin for online games business fell to 60.7 percent in the fourth quarter, down from 68.1 percent a year earlier. The company said the decline was due to higher staff-related costs.
Netease shares jumped as much as 12 percent to $293.68 in the early trading in New York. The stock has rose 36 percent this year.