Tuesday, February 28, 2012

Apollo Group (Nasdaq: APOL) cuts 2Q enrollment, profit views

Apollo Group (Nasdaq: APOL) cuts 2Q enrollment, profit viewsTallahassee, FL 2/28/12 (StreetBeat) -- For-profit education company Apollo Group Inc. (Nasdaq: APOL) lowered its expectations for student numbers and operating profit on Tuesday, saying changes in how it finds students, more competition from other schools and the improving labor market had hurt its fiscal second quarter.

Its stock dropped $6.51 or 13 percent, to $44.89 in premarket trading.

Enrollments soared for the owner of the University of Phoenix and for-profit schools early in the recession, as the weak economy and high unemployment made education more appealing for job-seekers. But new, stricter government regulations enacted last summer, negative media reports on the for-profit sector and moves by Apollo and other private education providers to raise admissions standards have weighed on enrollments.

Apollo said Tuesday that it now expects new students enrolling in degree programs for the period ending Feb. 29 to be flat to up by a low-single-digit percentage from the year before. Its prior forecast was for a performance similar to that of the November-January quarter, when new degreed enrollment climbed about 13 percent.

Taking out an extra day in the second quarter, Apollo anticipates that the measure will decline by a low- to mid-single digit percentage. This compares with a previous guidance for a mid-single digit percentage increase.

The company also cut its operating profit outlook for its fiscal year, which ends in August. Apollo now expects operating profit between $625 million and $725 million, excluding one-time items. It previously predicted operating profit between $655 million and $750 million. Analysts polled by FactSet were predicting $746 million.

Apollo said it still expects revenue of $4.1 billion to $4.3 billion for the year, in line with analyst estimates.

Last month Phoenix-based company reported that its net income sank by 37 percent in its fiscal first quarter because of shrinking enrollments at the University of Phoenix.

The company expects new student enrollments to fluctuate for the rest of the year.

Apollo will report its second-quarter financial results on March 26.

StreetBeat Disclaimer

Distributed by Viestly

No comments:

Post a Comment