What happened

Shares of New Oriental Education (EDU -1.17%) were jumping after the Chinese tutoring company posted better-than-expected results in its fiscal first-quarter earnings report.

As a result, the stock was up 18.7% as of 10:12 a.m. ET this morning.

So what

New Oriental is still adjusting its business after China banned for-profit tutoring in core K-12 education a year ago.

Consequently, revenue at the company, which offers both online and in-person educational services, fell 43.1% to $744.8 million, however, that still beat estimates at $675.1 million.

Despite the drop in revenue, adjusted operating income increased 28.3% to $97 million. Adjusted earnings per share, however, fell from $0.66 to $0.48 due to an adjustment related to non-controlling interests in the company. That still beat the consensus at $0.38.

Because of the new policy regarding for-profit tutoring, New Oriental Education has been forced to close schools and learning centers -- the total number fell from 1,556 a year ago to 706. The company did see traction in its overseas business as well as non-academic tutoring, which attracted 297,000 enrollments in the quarter. 

New Oriental's Executive Chairman Michael Yu said in a press release:

Our remaining key businesses continued to see a promising trend. In this fiscal quarter, the overseas test preparation and overseas study consulting businesses increased by approximately 2% and 21% year over year, respectively. Our domestic test preparation business targeting adults and university students increased by approximately 2% year over year.

Now what

Looking ahead, New Oriental said that second-quarter revenue would be lower than the first quarter due to seasonality. It forecast revenue of $601.4 million-$619.2 million, or a decline of 6%-9% from a year ago, showing it's lapped the worst of the new restrictions. That was also better than estimates at $576.6 million.

After New Oriental's shares plunged nearly 90% last year on the regulatory crackdown, the stock has quietly rebounded, recouping some of those losses, and the business seems to be stabilizing.

While investing in China is especially risky at the moment, New Oriental shares could continue to climb higher as it refocuses its business.