Key Takeaways:
New Oriental Education reported revenue for its fiscal quarter through August reached $1.52 billion, up 6% year-on-year
The education services provider's revenue for its fiscal year through May is expected to reach up to $5.4 billion
As report cards go, the latest quarterly update from New Oriental Education & Technology Group Inc. (NYSE:EDU) (9901.HK) won't earn the company any gold stars. The leading education services provider reported last week its revenue for the three months through August, the first quarter of its fiscal year, rose 6.1% year-over-year to $1.52 billion, while its operating profit increased 6% to $310 million.
Among its various segments, revenue for overseas test preparation and overseas study consulting grew just 1% and 2% year-over-year, respectively. Its domestic exam prep business for adults and university students performed better, up 14.4% year-on-year, while its new educational business initiatives grew 15.3%.
While revenue slightly exceeded the upper end of its previous guidance for up to $1.51 billion, investors were left unimpressed by a 1.9% decline in its net profit to $240 million.
Stock tumbles
The falling profit spooked investors, with New Oriental's U.S.-listed shares plummeting over 9% in intra-day trade after the announcement, before paring those losses to close down 3.4% for the day at $58.56. Its Hong Kong-listed shares also fell the day after the report's release.
Despite the selloff, the stock currently trades more than 20% higher from its six-month lows, showing investors haven't abandoned the company just yet. Equally significant, the shares now trade above the roughly HK$50 level where they were when New Oriental and its peers took a beating in 2021 after Beijing banned them from their main business of providing after-school tutoring ...
