Chinese Gaming Player NetEase Stock Slips After Mixed Q3, CFO Departure
Portfolio Pulse from Anusuya Lahiri
NetEase, Inc (NASDAQ:NTES) reported Q3 FY23 revenue of $3.74 billion, below the consensus of $3.8 billion, but beat EPS estimates with $1.82 versus $1.46 consensus. Gaming revenues grew by 16.5%, while Cloud Music's revenues fell by 16.3%. The company announced a dividend of $0.4950 per ADS, down from $0.5250 in Q2. CFO Charles Zhaoxuan Yang resigned, effective November 30, 2023. NTES shares dropped 4.85% in premarket trading.
November 16, 2023 | 11:40 am
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NEGATIVE IMPACT
NetEase reported mixed Q3 results with revenue miss and EPS beat, announced a lower dividend, and experienced the resignation of CFO Charles Zhaoxuan Yang.
The revenue miss and the CFO's resignation are negative signals that could reduce investor confidence, while the EPS beat is positive but overshadowed by the negatives. The dividend cut also suggests potential cash flow concerns. The premarket stock price reaction indicates a negative short-term impact.
CONFIDENCE 85
IMPORTANCE 90
RELEVANCE 100
POSITIVE IMPACT
Youdao, Inc (NYSE:DAO), a part of the NetEase group, reported a 9.7% Y/Y revenue increase to $210.9 million with an improved gross margin.
Youdao's revenue growth and margin improvement are positive indicators of its financial health. However, as a subsidiary of NetEase, its stock may be influenced by the parent company's overall performance and news, which is mixed.
CONFIDENCE 75
IMPORTANCE 60
RELEVANCE 50