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Netease.com 4Q net income jumps 25 percent

Thu, 02/24/2011 - 1:05pm

Chinese online game and Web advertising company NetEase.com Inc. said its fourth-quarter net income jumped 25 percent, helped in part by the launch of extra content for a popular video game called World of Warcraft.

Results beat Wall Street's expectations, sending shares up $2.58, or 6 percent, to close at $45.46.

For October through December, net income rose to 712.5 million yuan ($108 million), or 83 cents per U.S.-traded share, from 571.8 million yuan in the same period a year earlier.

That's better than Wall Street expected. Analysts surveyed by FactSet had forecast net income of 71 cents per American depository share share.

Revenue improved 30 percent to 1.7 billion yuan ($254.5 million) from 1.3 billion yuan in the year-ago quarter, also above the $222.8 million that analysts had predicted.

Netease said its online game revenue increased 31 percent from the prior year to $215.5 million thanks to an "expansion pack," or new levels and storylines, for the popular online game World of Warcraft, which it licenses from game maker Blizzard Entertainment. The company said games and expansion packs it developed in-house also helped boost revenue.

Advertising services revenue rose 27 percent from a year earlier to $35.4 million. Netease said sponsorship of major Chinese national events and programs raised the profile of the company's Web portal and provided good value to advertisers.

For the full-year, Netease said net income grew 21 percent to 2.2 billion yuan ($338.7 million), or $2.60 per U.S.-traded share, from 1.9 billion yuan in 2009.

Annual revenue rose 48 percent to 5.7 billion yuan ($857.5 million) from 3.8 billion yuan.

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