TAL Education Group Earnings: Here’s Why Investors are Buying Shares Now

TAL Education Group (NYSE:XRS) delivered a profit and beat Wall Street’s expectations, AND beat the revenue expectation. The revenue beat is a positive sign to shareholders seeking high growth out of the company. Shares are up 3.18%.

TAL Education Group Earnings Cheat Sheet

Results: Adjusted Earnings Per Share increased 44.44% to $0.13 in the quarter versus EPS of $0.09 in the year-earlier quarter.

Revenue: Rose 24.52% to $61.4 million from the year-earlier quarter.

Actual vs. Wall St. Expectations: TAL Education Group reported adjusted EPS income of $0.13 per share. By that measure, the company beat the mean analyst estimate of $0.07. It beat the average revenue estimate of $58.52 million.

Quoting Management: “We are pleased to report first fiscal quarter results that reflect a solid quarter of execution-on-plan. Net revenues increased by 24.5% year-over-year to $61.4 million, over $2 million above the top end of our guidance. Revenue growth was supported by a 17.1% increase in enrollments. As expected, our small class business in markets other than Beijing and Shanghai remained the key engine of our growth. These cities accounted for 34% of small class revenues in the first quarter, compared to only 21% during the same period in the previous fiscal year. Meanwhile, the positive momentum in Shanghai continued in the first quarter, indicating our Shanghai tutoring business has turned the corner following a year of transition,” said TAL’s Chairman and Chief Executive Officer, Mr. Bangxin Zhang.

Key Stats (on next page)…

Revenue increased 2.93% from $59.65 million in the previous quarter. EPS increased 18.18% from $0.11 in the previous quarter.

Looking Forward: Analysts have a more negative outlook for the company’s next-quarter performance. Over the past three months, the average estimate for next quarter’s earnings has fallen from a profit of $0.26 to a profit $0.23. For the current year, the average estimate has moved down from a profit of $0.60 to a profit of $0.56 over the last ninety days.

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(Company fundamentals provided by Xignite Financials. Email any earnings discrepancies to earnings [at] wallstcheatsheet.com)