NetEase.com Reports Lower Net Profits

Net profit for the third quarter of 2007 totaled RMB260.2 million, compared to RMB312.6 million and RMB314.8 million for the preceding quarter and the third quarter of 2006, respectively. Total revenues for the third quarter of 2007 were RMB571.1 million, compared to RMB558.0 million and RMB571.9 million for the preceding quarter and the third quarter of 2006, respectively.

Revenues from online games were RMB468.7 million for the third quarter of 2007, compared to RMB475.1 million and RMB467.9 million for the preceding quarter and the third quarter of 2006, respectively. Revenues from advertising services were RMB85.5 million for the third quarter of 2007, compared to RMB65.3 million and RMB83.4 million for the preceding quarter and the third quarter of 2006, respectively. Revenues from wireless value-added services and others were RMB16.9 million for the third quarter of 2007, compared to RMB17.5 million and RMB20.6 million for the preceding quarter and the third quarter of 2006, respectively.

Gross profit for the third quarter of 2007 was RMB441.9 million, compared to RMB437.8 million and RMB448.1 million for the preceding quarter and the third quarter of 2006, respectively. The quarter-over-quarter increase in gross profit was primarily due to higher advertising services revenue in the third quarter of 2007. The year-over-year decrease in gross profit was mainly due to the decrease in wireless value-added services revenue.

Total operating expenses for the third quarter of 2007 were RMB179.0 million, compared to RMB142.8 million and RMB131.5 million for the preceding quarter and the third quarter of 2006, respectively. Both the quarter-over-quarter and year-over- year increase was primarily driven by increased spending on the advertising and marketing promotion of Westward Journey Online III and Fantasy Westward Journey, and higher staff-related cost as a result of an increase in research and development headcount.

Source : Chinatechnews

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