NetEase Jumps on Earnings Topping Estimates, Bigger Buyback

© Reuters.

By Dhirendra Tripathi – NetEase stock (NASDAQ:) rose 4% in Tuesday premarket as second-quarter earnings at China’s second-largest gaming company beat estimates.

The company’s board also approved enhancing the size of the proposed buyback of shares and American depositary shares to up to $3 billion from $2 billion earlier. The company has so far spent approximately $500 million to repurchase ADSs.

The board also approved up to $50 million buy back of ADSs of its unit Youdao (NYSE:).

The company will also pay a dividend of 24 cents per ADS.

NetEase’s second-quarter total net revenue rose 13% on-year to 20.5 billion ($3.2 billion) as existing titles continued to attract players.

Net revenue at its search engine unit Youdao more than doubled to RMB 1.3 billion ($200.3 million).

NetEase’s higher operating expenses and foreign exchange losses weighed on the bottom line. Adjusted net income per ADS came in at RMB 6.24 and beat analysts’ estimate of RMB 6.16.

The company confirmed plans to release the game Harry Potter: Magic Awakened on September 9.

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