NetEase Inc. (NASDAQ: NTES) on Wednesday reported second quarter earnings that fell short of analysts’ estimates, sending its shares down over 7%.
The China’s online game Company said revenue rose 21.7% to RMB 16.3 Billion (USD 2.5 Billion) in the second quarter. Reportedly, E-commerce became the new driver of revenue.
E-commerce revenue jumped 75.2% to RMB4.4 Billion (USD 659.7 Million) in the quarter ended June 30th, 2018. It now accounts for 27% of the total revenue.
Online video game segment is still the biggest revenue contributor for the Company. Online game services net revenue increase 6.7% to RMB 10.1 Billion (USD 1.5 Billion). Growth in the Chinese gaming market slowed in 2018, but NetEase is still the second largest game service provider in China, with its popular PC and mobile flagship titles including Fantasy Westward Journey, Westward Journey Online, New Ghost, Onmyoji and Invincible.
"We are pleased with the solid growth we achieved across all of our business segments, including online games, e-commerce and advertising services, and the strong improvement to our bottom line," said Mr. William Ding, Chief Executive Officer and Director of NetEase. "Our PC-client and mobile games continue to serve as dual growth engines. At the end of June, we launched the highly anticipated PC-client game Justice. Featuring exciting new state-of-the-art technology and graphics, Justice has become one of the most acclaimed PC games launched in China in recent years.”
However, NetEase earnings fell as much as 8.47% to USD 231.54 in the early trading on Thursday. The stock was down over 30% this year.