NEW YORK (TheStreet) -- Xueda Education Group  (XUE)  fell in after-hours trading Monday after the company reported second-quarter earnings that came up short of analysts' expectations.

Adjusted net income per American Depositary Share was 27 cents, down from 28 cents in the same period one year earlier, while revenue increased 5.4% year-over-year to $120.8 million from $114.6 million. The consensus estimate called for EPS of 29 cents on revenue of $131 million.

For the third quarter, the company expects an adjusted loss of 8 cents a share on revenue of $73 million, while the consensus estimate calls for EPS of 8 cents on revenue of $99 million.

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For the full year, the company expects adjusted EPS of 16 cents on net revenue of $347.5 million. The consensus estimate calls for EPS of 31 cents on revenue of $394.05 million.

The stock was down 13.17% to $4.02 in after-hours trading.

Separately, TheStreet Ratings team rates XUEDA EDUCATION GROUP -ADR as a "hold" with a ratings score of C+. TheStreet Ratings Team has this to say about their recommendation:

"We rate XUEDA EDUCATION GROUP -ADR (XUE) a HOLD. The primary factors that have impacted our rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures and reasonable valuation levels. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income and poor profit margins."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • Despite its growing revenue, the company underperformed as compared with the industry average of 2.3%. Since the same quarter one year prior, revenues slightly increased by 1.6%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • XUE has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign.
  • XUEDA EDUCATION GROUP -ADR's earnings per share declined by 33.3% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, XUEDA EDUCATION GROUP -ADR increased its bottom line by earning $0.25 versus $0.04 in the prior year. This year, the market expects an improvement in earnings ($0.31 versus $0.25).
  • The gross profit margin for XUEDA EDUCATION GROUP -ADR is currently lower than what is desirable, coming in at 28.26%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 1.35% significantly trails the industry average.
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Diversified Consumer Services industry. The net income has significantly decreased by 42.7% when compared to the same quarter one year ago, falling from $2.02 million to $1.16 million.
  • You can view the full analysis from the report here: XUE Ratings Report

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Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.