What's Going On With New Oriental Education Shares Today?

New Oriental Education & Technology Group, Inc. EDU shares are trading lower on Wednesday.

The company reported that in the third quarter, adjusted earnings per share was 63 cents, missing the street view of 79 cents. 

Quarterly revenues of $1.207 billion beat the street view of $1.105 billion. Total net revenues increased by 60.1% year over year, owing to educational new business initiatives, East Buy private label products, and livestreaming e-commerce business.

Operating income increased by 70.6% year over year to $113.4 million for the third fiscal quarter of 2024.

Net income attributable to New Oriental increased by 6.8% year over year to $87.2 million.

“Our overseas test preparation and overseas study consulting businesses maintained a strong upward trajectory, exhibiting approximately 52.6% and 25.7% growth year over year, respectively,” said Michael Yu, New Oriental’s Executive Chairman.

The total number of schools and learning centers was 911 as of February-end, an increase of 68 and 199 compared to 843 as of November 30, 2023, and 712 as of February 28, 2023, respectively. “Among these new educational business initiatives, our non-academic tutoring courses were offered in around 60 cities, attracting approximately 355,000 student enrollments in this fiscal quarter,” Yu added.

Outlook: New Oriental expects total net revenues in the fourth quarter of $1.101 billion-$1.127 billion (estimate: $1.1 billion), representing a year-over-year increase in the range of 28%-31%.

The projected increase of revenue in the functional currency Renminbi is expected to be 34% to 37% for the fourth quarter of the fiscal year 2024.

Price Action: EDU shares are trading lower by 17.1% to $74.27 at last check Wednesday.

Image: Shutterstock/ MD Duran