NetEase.com Third Quarter Earnings Sneak Peek

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NetEase.com Inc (ADR) (NASDAQ:NTES) will unveil its latest earnings on Wednesday, November 14, 2012. NetEase.com is a China-based Internet technology company, which is engaged in the development of applications, services, and other technologies for the Internet in China.

NetEase.com Inc (ADR) Earnings Preview Cheat Sheet

Wall St. Earnings Expectations: The average analyst estimate is for net income of $1.09 per share, a rise of 10.1% from the company’s actual earnings for the year-ago quarter. During the past three months, the average estimate has moved down from $1.15. Between one and three months ago, the average estimate moved down. It has risen from $1.08 during the last month. Analysts are projecting profit to rise by 13% versus last year to $4.43.

Past Earnings Performance: Last quarter, the company missed estimates by 3 cents, coming in at profit of $1.05 per share versus a mean estimate of net income of $1.08 per share. In the first quarter, the company beat estimates by 12 cents.

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A Look Back: In the second quarter, profit rose 15.3% to $137.8 million ($1.06 a share) from $119.5 million (93 cents a share) the year earlier, but fell short analyst expectations. Revenue rose 15.2% to $308.9 million from $268.2 million.

Wall St. Revenue Expectations: On average, analysts predict $334 million in revenue this quarter, a rise of 8.8% from the year-ago quarter. Analysts are forecasting total revenue of $1.34 billion for the year, a rise of 15.5% from last year’s revenue of $1.16 billion.

Stock Price Performance: Between September 13, 2012 and November 8, 2012, the stock price had risen $3.98 (7.8%), from $50.75 to $54.73. The stock price saw one of its best stretches over the last year between February 17, 2012 and February 28, 2012, when shares rose for seven straight days, increasing 11.5% (+$5.50) over that span. It saw one of its worst periods between September 28, 2012 and October 10, 2012 when shares fell for nine straight days, dropping 7.5% (-$4.19) over that span.

Key Stats:

On the top line, the company is looking to build on two-straight revenue increases with this earnings announcement. Revenue rose 36.3% in the first quarter before climbing again in the second quarter.

Analyst Ratings: There are nine out of 15 analysts surveyed (60%) rating NetEase.com a buy.

Balance Sheet Analysis: The company’s current ratio of assets to liabilities came in at 6.64 last quarter. Having a ratio above 2:1 is usually considered a good indicator of a company’s liquidity and ability to meet creditor demands.

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(Company fundamentals by Xignite Financials. Earnings estimates provided by Zacks)

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