For-Profit Colleges Gain After Apollo Beats Estimates
Education companies gained in U.S. stock trading after Apollo Group Inc., the biggest for-profit college operator, reported quarterly results that were higher than analysts estimated.
Apollo rose $4.80, or 13 percent, to $40.74 at 4 p.m. New York time in Nasdaq Stock Market composite trading after the company said fiscal first-quarter profit excluding one-time items was $1.63 a share, beating the $1.35 average estimate of 21 analysts surveyed by Bloomberg. It was Apollo’s biggest increase since July, 2008, and the company was the biggest gainer in the Standard & Poor’s 500 Index. An index of 13 for- profit colleges gained 5.7 percent.
Apollo, the operator of the University of Phoenix, also said yesterday that the number of new students signing up for classes declined 42 percent to 56,500, from 98,100 a year earlier, after the company began allowing applicants to sample courses before paying to register. Apollo is cutting recruitment staff and working to manage bad debt expense, company officials said yesterday on a conference call with analysts and investors.
“We are encouraged that the cost of positioning the company for future success is not worse than expected given industry trends,” said Jarrel Price, an analyst with Height Analytics in Washington who doesn’t rate the shares, in a note to clients today.
Net income for the three months ended Nov. 30 fell 1.9 percent to $235.7 million, or $1.61 a share, from $240.1 million, or $1.54, a year earlier, Phoenix-based Apollo said yesterday in a statement.
Education Management Corp., based in Pittsburgh, gained 15 cents, or 1.1 percent, to $13.83. DeVry Inc., based in Downers Grove, Illinois, gained $1.99, or 4.7 percent, to $44.80 on the New York Stock Exchange.
To contact the reporter on this story: John Lauerman in Boston at firstname.lastname@example.org.
To contact the editor responsible for this story: Jonathan Kaufman at email@example.com.
Bloomberg moderates all comments. Comments that are abusive or off-topic will not be posted to the site. Excessively long comments may be moderated as well. Bloomberg cannot facilitate requests to remove comments or explain individual moderation decisions.