China’s private education services provider New Oriental Education & Technology Group (HKEX: 9901; NYSE: EDU) announced strong revenue growth for the third fiscal quarter, sending its shares up 5% to $15.93 intraday Monday.
The Beijing-based company said its revenues reached $1.2 billion in the three months through February, at a 29% year-over-year increase. Net income was $151.3 million, or 9 cents per American depositary share, representing a 10% increase from a year ago.
Michael Yu, the executive chairman of New Oriental, said “We are pleased to see the continued strong recovery of businesses for the third quarter despite the challenges from a small wave of Covid-19 outbreak in around 20 cities in north China where we responded swiftly and migrated offline classes to online using our OMO system during the winter.”
The company said quarterly student enrollments in academic subjects tutoring and test preparation courses increased by 43% from one year ago to 2.3 million
New Oriental also reported its nine-month financial results through February. For the nine months of the fiscal year 2020, its revenue increased 10% year-over-year to $3.6 billion. Student enrollment was 9.44 million, up 18% from the corresponding period in 2019. Net income hit $379.9 million, or 23 cents per ADS, down 5%, according to the report.
“Looking ahead, we believe our business will trend toward a normalized level in the coming quarters after seeing the underlying demand for after-school tutoring picking up rapidly as the pandemic situation was well controlled nationwide,” Yu said.
The company said it expects to generate revenues in the fourth quarter of the fiscal year 2020 of between $1.1 billion and $1.14 billion at the year-over-year growth rate of 38% to 43%.
Earlier this month, New Oriental announced that its primary school general education business has struck a deal with Universal Pictures (NYSE: UVV).
Under the agreement, the company has obtained IP authorization from DreamWorks, a subsidiary of Universal. The two parties will jointly create IP series-themed courses and various scenarios of student activities. New Oriental will become a strategic partner of Universal Pictures in mainland China.