Oppenheimer Comments On ChinaEdu's 3Q Outperformance

ChinaEdu's CEDU 3Q EPS of $0.10 exceeded Oppenheimer's estimate of $0.07, with strength across the board. Revenue of $15.1M was above its $14.4M est and the guidance range of $14.2-14.6M; GAAP operating margin of 24.7% also exceeded the 22% est, both mainly driven by better than expected performance at its Anqing School's new campus. Separately, the company also announced the resignation of its CFO, Lily Liu. Oppenheimer's brief discussion with Ms. Liu indicates this is solely for personal reasons. It does not anticipate major operational disruptions as when her predecessor resigned in 2008. Management's 4Q rev guidance of $14.8-$15.8M is in line with Oppenheimer's est of $15.4M/consensus of $15.5M, and suggests +9.3% y/y or flat q/q growth. Oppenheimer has a Perform rating on CEDU CEDU closed Thursday at $7.59