TAL Education Group Q3 Adj. Profit Tops View; Issues Q4 Revenue Outlook

(RTTNews) - TAL Education Group (XRS), a leading K-12 after-school tutoring services provider in China, reported that its net income attributable to the company for the third quarter decreased 12.4% to US$11.0 million, from US$12.5 million in the prior year quarter. Net income per ADS were US$0.13, down from US$0.15 last year.

Non-GAAP net income attributable to TAL increased to US$15.9 million or US$0.19 per ADS from US$14.6 million or US$0.18 per ADS in the third quarter of fiscal year 2014. On average, 5 analysts polled by Thomson Reuters expected the company to report earnings of $0.17 per share for the quarter. Analysts' estimates typically exclude special items.

Quarterly net revenues were US$99.37 million, up 35.1% from US$73.53 million in the comparable quarter last year, while four analysts had a consensus revenue estimate of $97.66 million. The increase was mainly driven by an increase in total student enrollments.

Total student enrollments increased by 35.6% to approximately 304,910 from approximately 224,810 in the same period of the prior year. The increase in total student enrollments was driven primarily by increases of enrollments in the small class offerings.

Looking ahead to the fourth quarter, the company expects total net revenues to be between US$116.6 million and US$119.2 million, representing an increase of 34% to 37% on a year-over-year basis. Analysts expect the company to report revenues of $116.29 million for the fourth-quarter.

Total net revenues for the fiscal year ending February 28, 2015 are expected to be between US$427.4 million and US$430.0 million, representing an increase of 36% to 37% year-over-year. Analysts now expect revenue of $426.02 million for fiscal 2015.