Posted By: Janine Delacroix

By Motley Fool Contributors

On Nov. 6, NetEase.com (Nasdaq: NTES - News) released third-quarter earnings for the period ended Sept. 30. ADVERTISEMENT
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• To get the full story about this Chinese gaming site and portal, click here.
  
  

• 21.2% growth in advertising revenue stemmed mostly from improved content; utilization of new products and services helped drive a 32% increase in total revenue.
  
  

• Of the 104 players that have rated three-star NetEase in CAPS, 97 of them gave the stock the green light.

(Figures in thousands, except per-share data)

Income Statement Highlights

Q3 2006Q3 2005ChangeSales$72,356.1$54809.232%Net Profit$39,825.4$31,967.924.6%Earnings Per ADS$0.29$0.22*31.8%Diluted Shares*139,416.5145,300(4%)

*data provided by Capital IQ

Get back to basics with a look at the income statement.

Margin Checkup

Q3 2006Q3 2005Change*Gross Margin81.7%84.3%(2.6)Operating Margin57.7%59.7%(2.0)Net Margin57.4%55.9%1.5

*Expressed in percentage points

Margins are the earnings engine. See how they work.

Balance Sheet Highlights

AssetsQ3 2006Q3 2005ChangeCash + ST Invest.*$478,725.8$392,403.922%Accounts Rec.$14,901.2$9,287.660.4%

*Short term investments are represented by Time deposits.

LiabilitiesQ3 2006Q3 2005ChangeAccounts Payable$4,540.9$15,964.8(71.6%)Long-Term Debt$101,419.4$101,432.7(0%)

Learn the ways of the balance sheet.

Cash Flow Highlights

Q3 2006Q3 2005ChangeCash From Ops.$43,579.4$52,511.7(17%)Capital Expenditures$6,645.9$3,949.368.3%Free Cash Flow$36,933.5$48,562.4(23.9%)

Find out why Fools always follow the money.

Related Companies:

• Sina (Nasdaq: SINA - News)
• Sohu.com (Nasdaq: SOHU - News)
• Baidu.com (Nasdaq: BIDU - News)

NetEase.com is a
Motley Fool Rule Breakers
recommendation, and Sina is a
Motley Fool Stock Advisor
pick.

Fool by Numbers is designed to give you the raw earnings information in a timely fashion, putting all the numbers you need in one easy-to-read place. But at The Motley Fool, we believe numbers tell only part of the story, so check
Fool.com for more of our in-depth discussion of what the numbers mean. This data has been provided by Netscribes. To provide feedback on this article, please click on the "feedback" button below.

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