NetEase Reports Second Quarter 2012 Unaudited Financial Results
Posted on 2012-08-16 10:58:55 BJT, by NetEase
"In the second quarter, we continued to advance our self-developed games with certain standout performances. Ghost achieved record revenue in May, gaining traction from its open beta testing launch in April. Fantasy Westward Journey demonstrated a stable increase in revenue driven by positive user response to new content for this game. During the second quarter, we also launched open beta testing for Tianxia III, as well as released new expansion packs for Warsong of Westward Journey in April, Heroes of Tang Dynasty in May and Westward Journey Online II at the end of June. We expect the effect from the new launches for our self-developed games to be reflected in upcoming periods."
"Although playing time for Blizzard Entertainment's World of Warcraft® declined during the second quarter, leading to a quarter-over-quarter decrease of online game revenues, World of Warcraft continues to have a very enthusiastic community of players in
"In the second half of the year, we will focus on launching several new games and introducing expansion packs to existing games such as Fantasy Westward Journey, Tianxia III, Ghost and Westward Journey Online III. Our newest games under development are progressing well. In response to growing market demand for action games, we launched initial closed beta testing for two such games in July:
"Content innovation, new product development as well as service integration among mobile platforms continues to attract new advertising customers. Revenues from advertising services grew 42.3% quarter-over-quarter, led by the automobile, fast moving consumer goods and financial services sectors. Our recent focus has been on high profile sporting events, such as Euro Cup 2012 and the London Olympics. In the second quarter, we were pleased to secure a strategic partnership with China Network Television to broadcast the London Olympic Games as well as the opening and closing ceremonies on our portal and our top-ranking mobile news application."
"Mobile access and the introduction of new attractive content are contributing to continued user growth in our portal and e-mail business. In the second quarter, the registered number of users for our micro-blogging service increased by 48.8% sequentially to 180 million. Mailbox services also increased to 495 million registered users as of
"Our robust games portfolio, industry leading portal and growing search business are built on the success of providing a highly differentiated platform that caters to quality and optimizing user experience. We continue to build our products and services to meet customers' demands for new content with a robust pipeline of games and activities planned for the second half of the year," Mr. Ding concluded.
Second Quarter 2012 Financial Results
Total revenues for the second quarter of 2012 were
Revenues from online games were
Revenues from advertising services were
Revenues from e-mail, wireless value-added services and others ("E-mail, WVAS and others") were
Gross profit for the second quarter of 2012 was
The year-over-year increase in gross profit was primarily attributable to increased revenues from
Gross Profit (Loss) Margin
Gross profit margin for the online game business for the second quarter of 2012 was 73.3%, compared to 73.0% and 70.2% for the preceding quarter and the second quarter of 2011, respectively.
Gross profit margin for the advertising business for the second quarter of 2012 was 33.0%, compared to 19.8% and 43.9% for the preceding quarter and the second quarter of 2011, respectively. The quarter-over-quarter increase in gross profit margin was primarily due to an increase in advertising revenues. The year-over-year decrease in gross profit margin was primarily due to increased headcount-related costs and video content costs incurred in the second quarter of 2012.
Gross loss margin for the E-mail, WVAS and others business for the second quarter of 2012 was 11.6%, compared to 18.0% and 7.8% for the preceding quarter and the second quarter of 2011, respectively. The quarter-over-quarter change was mainly due to improved performance from
Total operating expenses for the second quarter of 2012 were
Net profit for the second quarter of 2012 totaled
During the second quarter of 2012, the Company reported a net foreign exchange loss of
The Company recorded a net income tax charge of
The Company's various principal subsidiaries renewed their qualifications as High and
The year-over-year increase in effective tax rate was primarily due to the expiration of the enterprise income tax exemption period for certain subsidiaries that were qualified as
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