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NetEase (NASDAQ:NTES) is scheduled to report its Q2 2012 results on Aug. 15, 2012, after the closing bell. The Street expects EPS and revenue of $1.08 and $333.53 million, respectively.

In this article I will recap the historical results of NetEase, its latest EPS estimates vs. surprises, the latest news from the company, and the latest news from its closest competitors.

NetEase, Inc Revenue and Net Income History

Recent EPS: Actual vs. Estimates

The company has met or beaten analysts' estimates in the last four quarters. In the last quarter it reported EPS of $1.14, beating analyst estimates of $1.01.

NetEase, Inc EPS Historical Results vs Estimates

The consensus EPS estimate is $1.08 based on 14 analysts' estimates, up from $0.91 a year ago. Revenue estimates are $333.53 million, up from $268.22 million a year ago. The median target price by analysts for the stock is $67.50.

Average Recommendation: Overweight

Source: MarketWatch.

Latest News

  • On May 16, 2012, NetEase announced its unaudited financial results for the first quarter ended March 31, 2012. Net profit for the first quarter of 2012 totaled RMB941.7 million (US$149.5 million), compared to RMB898.6 million and RMB737.4 million for the preceding quarter and the first quarter of 2011, respectively. Total revenues for the first quarter of 2012 were RMB2.0 billion (US$318.2 million), compared to RMB2.1 billion and RMB1.5 billion for the preceding quarter and the first quarter of 2011, respectively.
  • On March 29, 2012, NetEase announced that it received shareholder approval at the company's extraordinary general meeting of shareholders (EGM) to change its corporate name from NetEase.com, Inc., to NetEase, Inc.
  • On March 20, 2012, Blizzard Entertainment (NASDAQ:ATVI) and NetEase announced that they will continue their existing cooperation on Blizzard Entertainment's "World of Warcraft" in mainland China. The new license will continue for an additional three years following the expiration of the current license agreement.

Competitors

Baidu (NASDAQ:BIDU), Perfect World (NASDAQ:PWRD), Renren (NYSE:RENN), SINA Corporation (NASDAQ:SINA), and Sohu.com (NASDAQ:SOHU) are peers of NetEase, and the table below provides the key metrics for these companies and the industry.

NetEase, Inc key ratio comparison with direct competitors

The chart below compares the stock price changes as a percentage for the selected companies for the last one-year period.

NTES Chart

Competitors' Latest Developments

  • On Aug. 8, 2012, Renren announced that for the third quarter of 2012 it expects to generate revenues in an amount ranging from $49-$51 million. According to I/B/E/S estimates, analysts were expecting the company to report revenue of $52 million for the third quarter of 2012.
  • On Aug. 6, 2012, SOHU.com announced that for the third quarter of 2012 it expects total revenues between $272 million and $277 million, non-GAAP net income between $19 million and $21 million, and non-GAAP fully diluted EPS between $0.50 and $0.55. According to I/B/E/S estimates, analysts were expecting the company to report revenue of $274 million, net income of $24 million, and EPS of $0.60 for the third quarter of 2012.
  • On July 23, 2012, Baidu announced that it expects to generate total revenues in an amount ranging from RMB6.245 billion (US$983.0 million) to RMB6.410 billion (US$1.009 billion) for the third quarter of 2012.
  • On May 30, 2012, Perfect World announced that for the second quarter of 2012, it expects revenue to be between RMB647 million and RMB683 million. According to I/B/E/S estimates, analysts were expecting the company to report revenue of RMB783 million for the second quarter of 2012.
  • On May 15, 2012, Renren announced that for second quarter of 2012, it expects revenues in an amount ranging from $41-$43 million. According to I/B/E/S estimates, analysts are expecting the company to report revenue of $46 million for second quarter of 2012.
  • On April 30, 2012, Sohu.com announced that for the second quarter of 2012, it estimates total revenues to be between $244 million and $250 million, non-GAAP net income to be between $34 million and $37 million, and non-GAAP fully diluted earnings per share to be between $0.40 and $0.45. According to I/B/E/S estimates, analysts were expecting the company to report revenue of $251 million, net income of $32 million, and EPS of $0.81 for the second quarter of 2012.
  • On April 24, 2012, Baidu announced that for the second quarter of 2012 it expects to generate total revenues in an amount ranging from RMB5.335 billion ($847.2 million) to RMB5.460 billion ($867.0 million).
  • On April 20, 2012, Rakuten announced that it has decided to stop the e-commerce service in China, which has been provided through a joint venture established by Rakuten and Baidu.
  • On April 11, 2012, Renren announced a partnership with Intel and Feitian, innovator of security technologies and applications, to introduce Intel identity protection technology to Renren's SNS platform.
  • On March 15, 2012, Perfect World announced that for the first quarter of 2012 it expects revenues to be in the range of RMB714-RMB753 million.
  • On March 9, 2012, Renren announced that for the first quarter of 2012 it expects revenues to be in the range of $28 million to $30 million. For fiscal 2012, it expects revenues to be between $177 million and $183 million.
  • On Feb. 16, 2012, Baidu announced that for the first quarter of 2012, it expects to generate total revenues in an amount ranging from RMB4.195 billion ($666.5 million) to RMB4.330 billion ($688.0 million).

Technical Overview


The stock has a market capitalization of $7.17 billion and is currently trading at $54.78, with a 52-week range of $35.74 to $65.54. The stock's year-to-date performance has been 22.14%. It is currently trading above the 20-day and 200-day SMAs, but below the 50-day SMA.

Data sourced from Yahoo Finance, Google Finance, Marketwatch, Finviz, and Reuters.

Source: Earnings Preview: NetEase