Cost Pressures Hit NetEase's Bottom Line

Cost Pressures Hit NetEase's Bottom Line

For many up-and-coming companies, producing consistent revenue growth is the primary sign of success. When a company gets better established as a key player in its field, as Chinese video game giant NetEase (NASDAQ: NTES) has, turning that revenue into profit becomes at least as important to demonstrate its leadership in the industry.

Coming into the third-quarter financial report on Nov. 15, NetEase investors were ready to see further bottom-line pressure even as they anticipated another big jump in revenue. NetEase saw the expected boost to its sales, but a substantial jump in operating costs held back any potential profit gains. Let's look more closely at NetEase and what its latest results indicate about its prospects.

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Source: Fool.com