ads

Why TAL Education Group Stock Dropped Today

What happened

Shares of TAL Education (NYSE: TAL) have dropped today, down by 10% as of 12:20 p.m. EDT, after the China-based after-school tutoring company reported fiscal first-quarter earnings.

So what

Revenue in the fiscal first quarter jumped 71% to $550.6 million, with operating income more than doubling to $75 million. Net income similarly more than doubled to $66.8 million, or $0.11 per American depositary share (ADS). On a non- GAAP basis, earnings per ADS were $0.14. Three American depositary shares represent one Class A common share.

Chinese tutor teaching a student

Image source: Getty Images.

Total student enrollments jumped by 89% to nearly 2 million, up from 1.05 million a year ago. The company expanded its physical network to 630 learning centers in 43 cities.

Now what

"The first quarter's financial and operational results reflect the steady growth of our offline and online business revenue and enrollments on a year-over-year basis," CFO Rong Luo said in a statement. "Looking ahead, we will pursue continuous improvements in product quality and customer satisfaction and we remain committed to a healthy and sustainable overall business development."

In terms of guidance, TAL expects net revenue in the fiscal second quarter to be in the range of $647.2 million to $660.8 million, representing growth of 42% to 45%. If you exclude the recent depreciation of the yuan relative to the U.S. dollar, top-line growth should be in the range of 40% to 43%.

10 stocks we like better than TAL Education Group

When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor , has quadrupled the market.*

David and Tom just revealed what they believe are the 10 best stocks for investors to buy right now... and TAL Education Group wasn't one of them! That's right -- they think these 10 stocks are even better buys.

Click here to learn about these picks!

*Stock Advisor returns as of June 4, 2018

Evan Niu, CFA has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy .

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

More Related Articles

Sign up for Smart Investing to get the latest news, strategies and tips to help you invest smarter.