NetEase (NTES) shares tumbled 7.61% in pre-market trading on Thursday following the release of its second-quarter earnings report, which fell short of analysts' expectations.
The Chinese internet and online game services provider reported Q2 net revenue of 27.89 billion Chinese Renminbi, missing the FactSet consensus estimate of 28.41 billion Renminbi. Additionally, NetEase posted adjusted earnings per American Depositary Share (ADS) of 14.81 Renminbi, slightly below the FactSet estimate of 14.90 Renminbi.
This earnings miss has clearly disappointed investors, leading to the significant pre-market sell-off. The market's reaction suggests concerns about NetEase's growth trajectory and its ability to meet future expectations in the highly competitive Chinese tech sector. Investors will likely be closely watching the company's upcoming earnings call for more details on the factors behind the underperformance and management's outlook for the coming quarters.
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