The stock in TAL Education (NYSE: TAL) plunged nearly 7% to $50.55 American depositary share in early trading on Tuesday, after the company announced weak profit for the third quarter fiscal year 2020.
The Beijing-based after school tutoring provider said in a statement today that in the three months through November its revenue reached $862.4 million, up 47% year-over-year. Driving the growth in the period was student enrollments, which hit 2.3 million, representing a 66% increase from the same period of the preceding year.
However, net income fell to $25 million, or 5 cents per ADS compared with $123.8 million, or 21 cents per ADS from the same corresponding period of 2018.
It was a successful 2019 for TAL in the markets. While TAL opened the year trading at $26.20 per ADS, its stock skyrocketed to $48.20 apiece by the end of 2019. In the third quarter TAL expanded its presence in the U.S., with its math training unit Think Academy launching in Silicon Valley and opening its first overseas center in Boston.
In April, TAL announced it joined the United Nations Educational Scientific and Cultural Organization (UNESCO) to develop future education through Artificial Intelligence (AI). The agreement between the two parties carries a three-year term.
"We expect the growth momentum of our overall business to continue as we further develop our offline network at a suitable speed and scale our online offerings," Rong Luo, the chief executive officer of TAL said in a statement today.
He added, "We will keep up the progress to make our various offline and online tutoring services more widely available in larger geographies by leveraging our offline and online advantages and new technology resources.”
TAL, which stands for “Tomorrow Advancing Life" offers its K-12 tutoring services through small classes, personalized premium services, and online courses. According to its statement, TAL’s learning network center covers 70 cities.
Going forward, TAL said it expects to generate revenue in the range of $959.1 million and $980.9 million for the fourth quarter fiscal year 2020, representing year-over-year growth of 32% to 35%.