New Oriental Education & Technology Group
The 10-second takeaway
For the quarter ended Nov. 30 (Q2), New Oriental Education & Technology Group beat expectations on revenues and whiffed on earnings per share.
Compared to the prior-year quarter, revenue increased significantly, and earnings per share improved significantly.
Gross margins increased, operating margins shrank, and net margins improved.
New Oriental Education & Technology Group tallied revenue of $132 million. The nine analysts polled by S&P Capital IQ predicted a top line of $129 million. Sales were 38% higher than the prior-year quarter's $96 million.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions.
Non-GAAP EPS came in at $0.05. The six earnings estimates compiled by S&P Capital IQ forecast $0.06 per share on the same basis. GAAP EPS of $0.02 for Q2 were 100% higher than the prior-year quarter's $0.01 per share.
Source: S&P Capital IQ. Quarterly periods. Figures may be non-GAAP to maintain comparability with estimates.
For the quarter, gross margin was 53.7%, 30 basis points better than the prior-year quarter. Operating margin was -3%, 90 basis points worse than the prior-year quarter. Net margin was 2.5%, 60 basis points better than the prior-year quarter.
Next quarter's average estimate for revenue is $177 million. On the bottom line, the average EPS estimate is $0.23.
Next year's average estimate for revenue is $758 million. The average EPS estimate is $1.00.
The stock has a two-star rating (out of five) at Motley Fool CAPS, with 723 members out of 876 rating the stock outperform, and 153 members rating it underperform. Among 241 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 173 give New Oriental Education & Technology Group a green thumbs-up, and 68 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 $34.92.
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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.