New Oriental Education & Technology Group has experienced a remarkable rally in its shares following the announcement of strong second-quarter earnings. The Chinese after-school tutoring company's success indicates a return to its expansion mode.
In the quarter ended in November, New Oriental reported earnings of $30.1 million, or 18 cents per American depositary share. This represents a significant increase from $732,000 in the same period last year. Furthermore, fiscal second-quarter revenue soared by 36% to reach $869.6 million.
The company and other tutoring firms faced significant challenges in 2021 due to reforms in China, which resulted in the closure of over half of New Oriental's schools and learning centers. Consequently, the company shifted its focus back to test-preparation services.
In its recent earnings report, New Oriental revealed its intention to expand its network of schools and learning centers once again. The count is set to increase from 748 as of May 2023 to 843.
Looking ahead to the third quarter, New Oriental anticipates revenue ranging between $1.07 billion and $1.09 billion. This projection signifies at least a 23% growth compared to the seasonally softer second quarter.
As a result of the positive news, shares of New Oriental surged by 10% to reach $79.25.
