Chinese video game publisher and internet services firm NetEase (NTES) on Thursday crushed earnings estimates for the first quarter on better-than-expected sales. NetEase stock surged on the news.
NetEase earned an adjusted $2.41 per U.S. share on sales of $3.97 billion in the March quarter. Analysts polled by FactSet had expected earnings of $1.93 a share on sales of $3.95 billion. On a year-over-year basis, NetEase earnings rose 33% while sales increased 7%.
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Video games accounted for 83% of NetEase revenue in the first quarter. NetEase games include “Marvel Rivals,” “Once Human,” “Onmyoji” and “Where Winds Meet.” In addition to online and mobile games, NetEase offers a search engine, streaming music and other internet services.
“We entered 2025 with solid momentum, fueled by our ongoing innovation and new titles that strengthen our reach across genres and resonate with players around the world,” Chief Executive William Ding said in a news release.
He added, “In addition to the strong performance of our latest games, our long-standing franchises continue to thrive, powered by outstanding content updates and continuous gameplay enhancements that bring fresh takes to player experiences.”
In morning trades on the stock market today, NetEase stock jumped more than 12% to 120.30.
With the gap up, NetEase shares cleared a buy point of 110.15 out of a 12-week consolidation pattern, according to a weekly chart on IBD MarketSurge. NetEase stock also rose above an 114.50 buy point on a daily MarketSurge chart.
NetEase Stock Ranks First In Group
On Tuesday, Deutsche Bank analyst Leo Chiang initiated coverage of NetEase stock with a buy rating and price target of 130.
“NetEase has established itself as the second-largest online gaming company in China, offering 100-plus mobile and PC titles spanning a wide range of genres,” Chiang said in a report. “It operates various non-gaming businesses, including music streaming, online learning, and e-commerce.”
The largest online gaming company in China is internet giant Tencent (TCEHY).
NetEase stock ranks first out of 23 stocks in IBD’s Computer Software-Gaming industry group, according to IBD Stock Checkup. It has an IBD Composite Rating of 95 out of 99.
Further, NetEase stock is on the IBD Tech Leaders list.
Follow Patrick Seitz on X, formerly Twitter, at @IBD_PSeitz for more stories on consumer technology, software and semiconductor stocks.
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