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BEIJING - On Wednesday, New Oriental Education & Technology Group Inc. (NYSE:EDU) reported mixed fourth-quarter results that showed strong revenue growth along with ongoing operational challenges.
The Chinese education provider’s shares fell 10.16% in pre-market trading after the release.
The company reported fourth-quarter adjusted earnings of $0.61 per ADS, significantly beating analyst estimates of $0.29. Revenue rose 9.4% YoY to $1.24 billion, surpassing the consensus estimate of $1.19 billion. However, the company posted an operating loss of $8.7 million compared to operating income of $10.5 million in the same period last year.
Excluding revenues from East Buy private label products and livestreaming business, core educational revenue increased by 18.7% YoY to $1.09 billion, highlighting strength in the company’s main business segments.
"We are delighted to conclude the fiscal year 2025 with a healthy top line growth of 9.4% in this quarter," said Michael Yu, New Oriental’s Executive Chairman. "Revenues from overseas test preparation and overseas study consulting businesses increased by approximately 14.6% and 8.2% year over year, respectively."
For fiscal year 2026, New Oriental expects revenue between $5.15 billion and $5.39 billion, representing YoY growth of 5% to 10%. First-quarter revenue is projected to be between $1.46 billion and $1.51 billion, suggesting growth of 2% to 5%.
The company also announced a new three-year shareholder return plan, committing to return at least 50% of annual net income to shareholders through dividends and/or share repurchases.
Despite the revenue beat, investors appeared concerned about the operating loss and slowing growth outlook for the coming quarters, driving the significant stock decline.
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