Chinese video game and internet services firm NetEase on Thursday matched analyst estimates for earnings in the second quarter but sales were weaker than expected. NetEase stock fell on the news.
NetEase earned an adjusted $2.07 per U.S. share on sales of $3.89 billion in the June quarter. Analysts polled by FactSet had expected earnings of $2.07 a share on sales of $3.95 billion. On a year-over-year basis, NetEase earnings increased 22% while sales climbed 9%.
Video game sales rose nearly 14% year over year in local currency to the equivalent of $3.2 billion in Q2. Sales declines in the company's streaming music and other businesses dragged on NetEase's results.
Top-performing games in the second quarter for NetEase included "FragPunk," "Dunk City Dynasty" and "Marvel Rivals."
"In the second quarter, we grew our player community with thrilling new content that reinforces our position as a creator of high-impact, genre-defining games," Chief Executive William Ding said in a news release.
NetEase Stock Pulls Back
On the stock market today, NetEase stock slid 3.9% to close at 129.67. With the drop, it fell below its 50-day moving average line, a key support level.
NetEase stock hit a record high of 141.45 on July 23. At the time, it was trading in the 20%-to-25% profit-taking zone of its May 15 breakout from a 12-week consolidation pattern at a buy point of 114.50, according to IBD MarketSurge charts.
NetEase stock ranks first out of 25 stocks in IBD's Computer Software-Gaming industry group, according to IBD Stock Checkup. It has an IBD Composite Rating of 96 out of 99.
Further, NetEase stock is on the IBD Tech Leaders list.
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