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NetEase continues growth with $307m sales, profits of $128m

WoW's Chinese operator outperforms expectations for game and advertising income

NetEase, the company which operates World of Warcraft in China for Blizzard, has reported another growth quarter with sales of $307 million and profits of $128 million for the three months ending 30 September, 2011.

Those figures represent a year-on-year growth of $87 million from revenues of $220.5 million for the same quarter last year, an increase of 46.7 per cent. Profits for the same quarter last year stood at $90.7 million.

NetEase operates several of its own online titles besides World of Warcraft as well as offering an advertising inventory on its portals and websites.

Both the company's direct revenues from game operation and its advertising sales grew. World of Warcraft's takings remained stable despite Activision Blizzard reporting a worldwide drop of 800,000 players and a difficult implementation of the game's Burning Cataclysm expansion.

Financial analysis company Cowen reported that the quarter had shown "earnings that significantly beat our and consensus estimates, driven principally by impressive growth from both older and newer internally developed online games."

However, Cowen retains a 'neutral' rating for the company's shares, thanks to potentially rising costs from increasing competition.

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Dan Pearson