NetEase and Youdao Both Gain on Strong Q1 Revenues
With people staying home during the coronavirus outbreak, NetEase attributed the growth to its online game services revenues.
Shares gained in NetEase, Inc. (Nasdaq: NTES) and its intelligent learning arm Youdao, Inc. (NYSE: DAO) in early trading Wednesday on generating strong revenues in the first quarter. NetEase rose $1.31 to $397.00 per American depositary share, while Youdao soared nearly 7% to $28.18.
NetEase said in a statement today that in the three months through March that revenues hit $2.41 billion, up 18% year-over-year. The numbers beat the average projection of $2.21 billion from 13 analysts compiled by Yahoo Finance. The Beijing-based gaming giant's net income rose to $557.94 million, or $3.83 per share compared with $347.12 million in the same period in 2019.
With people staying home during the coronavirus outbreak, NetEase attributed the growth to its online game services revenues, which hit $1.90 million in the quarter.
As for you Youdao, it reported more than doubled revenues $76.5 million, representing a 140% year-over-year increase. However, the Hangzhou-headquartered company's net loss widened to $23.96 million, or 21 cents per share compared with $12.96 million a year ago.
Both stocks have performed well this year; shares of NetEase are up nearly 27% year-to-date and Youdao has surged 100% YTD. Youdao made its public debut in October 2019, raising $95.2 million in its IPO.
"Our other core businesses are growing healthily. Both Youdao and NetEase Cloud Music are on track to reach their development goals for 2020," William Ding, chief executive officer and director of NetEase, said in a statement today.
He added, "Moving forward, we remain committed to our mission to deliver innovative products and high-quality services that surprise and impress our users, and the larger community worldwide."
NetEase did not provide guidance going forward.