Naver Second-Quarter Net Profit Rises 16%, Beating Consensus — Update

By Kwanwoo Jun

South Korean internet giant Naver reported a 16% rise in second-quarter net profit on accelerating growth in its core online-advertising business, beating market consensus.

Net profit for the quarter was 332.10 billion won, equivalent to $241.7 million, compared with 286.70 billion won a year earlier, the internet-platform company said Friday.

That beat a FactSet-compiled consensus forecast of 318.30 billion won in net profit.

Revenue for the period increased 8.4%, to 2.611 trillion won, and operating profit climbed 27% to 472.70 billion won.

The strong quarterly results came as the company's flagship search-platform advertising business grew 7.5% on the year for the second quarter, faster than the prior quarter and offsetting sluggishness in other segments.

Naver said that its e-commerce, fintech and cloud-computing businesses sustained growth during the second quarter but at a slower pace, while its paid-content business shrank slightly.

Accelerating search-platform business growth was a key driver of the solid overall earnings result, it said.

The company posted an operating profit margin of 18.1% for the second quarter, wider than 17.4% in the previous quarter.

Naver said it is continuing its artificial-intelligence monetization push, with South Korea's central bank, a state utility and other local firms showing their interest in its homegrown large language model, HyperCLOVA X.

The solid quarterly earnings sent shares in Naver as much as 4.5% higher to 170,000 won early on Friday, though the stock is still far below its peak of 465,000 won reached in July 2021.

Naver's stock has languished since late 2022 due to a slowdown in the internet platform industry in South Korea.

Write to Kwanwoo Jun at kwanwoo.jun@wsj.com

(END) Dow Jones Newswires

August 08, 2024 20:40 ET (00:40 GMT)

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