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New Oriental Education & Technology Group Hits Estimates, but GAAP Results Lag Last Year's

New Oriental Education & Technology Group (NYSE: EDU  ) reported earnings on April 17. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended Feb. 29 (Q3), New Oriental Education & Technology Group met expectations on revenues and earnings per share.

Compared to the prior-year quarter, revenue improved significantly and GAAP earnings per share dropped.

Gross margins increased, operating margins contracted, and net margins shrank.

Revenue details
New Oriental Education & Technology Group logged revenue of $174.5 million. The seven analysts polled by S&P Capital IQ expected revenue of $172.9 million on the same basis. GAAP reported sales were 32% higher than the prior-year quarter's $132.5 million.

Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.

EPS details
Non-GAAP EPS came in at $0.18. The five earnings estimates compiled by S&P Capital IQ predicted $0.18 per share on the same basis. GAAP EPS of $0.14 for Q3 were 6.7% lower than the prior-year quarter's $0.15 per share.

Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.

Margin details
For the quarter, gross margin was 58.8%, 20 basis points better than the prior-year quarter. Operating margin was 9.5%, 650 basis points worse than the prior-year quarter. Net margin was 12.8%, 480 basis points worse than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $178.8 million. On the bottom line, the average EPS estimate is $0.14.

Next year's average estimate for revenue is $761.0 million. The average EPS estimate is $0.97.

Investor sentiment
The stock has a two-star rating (out of five) at Motley Fool CAPS, with 719 members out of 871 rating the stock outperform, and 152 members rating it underperform. Among 231 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 166 give New Oriental Education & Technology Group a green thumbs-up, and 65 give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on New Oriental Education & Technology Group is outperform, with an average price target of $32.58.

Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor of Motley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. Motley Fool newsletter services have recommended buying shares of New Oriental Education & Technology Group. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.


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8/26/2016 4:01 PM
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