New Oriental Education & Technology Group Beats on Both Top and Bottom Lines

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

The 10-second takeaway
For the quarter ended May 31 (Q4), New Oriental Education & Technology Group beat expectations on revenues and beat expectations on earnings per share.

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


Gross margins improved, operating margins contracted, net margins dropped.

Revenue details
New Oriental Education & Technology Group reported revenue of $193.3 million. The 12 analysts polled by S&P Capital IQ expected sales of $187.8 million on the same basis. GAAP reported sales were 41% higher than the prior-year quarter's $137.4 million.

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

EPS details
EPS came in at $0.15. The eight earnings estimates compiled by S&P Capital IQ predicted $0.12 per share. GAAP EPS of $0.10 for Q4 were 11% higher than the prior-year quarter's $0.09 per share.

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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 59.5%, 80 basis points better than the prior-year quarter. Operating margin was 4.9%, 380 basis points worse than the prior-year quarter. Net margin was 8.4%, 200 basis points worse than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $353.8 million. On the bottom line, the average EPS estimate is $0.79.

Next year's average estimate for revenue is $1.01 billion. The average EPS estimate is $1.21.

Investor sentiment
The stock has a one-star rating (out of five) at Motley Fool CAPS, with 717 members rating the stock outperform and 152 members rating it underperform. Among 201 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 138 give New Oriental Education & Technology Group a green thumbs-up, and 63 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 $32.31.

At the time this article was published 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 ofMotley 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 Edu & Tech. 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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