American Depositary Shares of Beijing-based New Oriental Education and Technology Group Inc. rose on Thursday, after the education company posted a 38 percent higher quarterly profit.
The stock gained $2.14, or 3.2 percent, to $69.84 in afternoon trading.
New Oriental's fiscal third-quarter results topped expectations, despite severe winter weather in the country that caused many students to defer enrollment to future quarters, rather than cancel registration. Deferred revenue, or funds from students for classes in coming quarters, more than doubled to $35.8 million by the end of the quarter.
Earlier this year, snow and ice storms throughout parts of China caused deaths and airport closures and disruptions in train service. In January, Chief Financial Officer Louis T. Hsieh said students were having trouble getting to class and parents were keeping their children at home.
Brean Murray, Carret & Co. analyst Alex Xu said the company's fourth-quarter sales outlook of $32.1 million to $33.4 million came in slightly below Wall Street's expectation of $35 million, but thinks management is overly conservative.
"We see continued strong growth in the coming years, driven by new service offerings and organic enrollment increases," Xu wrote in a client note.
Xu has a "Buy" rating on the stock and $71 price target.
In afternoon trading, the Bank of New York Asia ADR index slipped 1.20 points to 154.83.
ADRs, or American Depositary Receipts, are securities designed to allow U.S. investors to trade shares of overseas companies.
Terms & Conditions
RSS Headlines
Fool UK