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NetEase.com Beats Online Gaming Forecasts

NetEase.com's (NTES) unaudited financial results for the fourth quarter and fiscal year ended December 31, 2005 show that quarterly revenues increased by 5.3% to CNY487.3 million.

Online game revenues for the quarter were better than the company previously forecasted and increased 7.6% quarter-over-quarter and 92.5% year-over-year to CNY400.9 million, which was driven by the continued growth in popularity of Fantasy Westward Journey and Westward Journey Online II, as reflected by the record peak concurrent user levels during the fourth quarter.

For the fiscal year 2005, the company reported total revenues of CNY1,694.4 million, a 76.8% increase over total revenues of CNY958.3 million for the fiscal year 2004.

For the fiscal year 2005, online game revenues totaled CNY1,379.5 million, up 119.3% from CNY628.9 million in fiscal year 2004.

Revenues from advertising services decreased by 5.9% to CNY69.1 million over the preceding quarter's CNY73.4 million. This represents an increase of 54.6% over CNY44.7 million for the corresponding period a year ago. NetEase says the quarter-over-quarter decrease was mainly due to seasonal impact, as certain advertisers decreased their spending during the winter season.

Total operating expenses for the fourth quarter were CNY94.9 million, a 0.2% increase from the previous quarter's CNY94.7 million.

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