April 24 (Bloomberg) -- DeVry Inc., a for-profit college operator, tumbled the most in nine months a day after reporting a 21 percent drop in new enrollment at its namesake university. Deutsche Bank AG cut its rating on the shares.
DeVry slid 20 percent to $27.09 at the close in New York, the biggest decline since July. Even after today’s drop, the stock has gained 14 percent this year.
The number of new students at DeVry University in the March session was 5,146, down from 6,533 a year earlier, the Downers Grove, Illinois-based company said yesterday in a statement. Total enrollment at the university dropped 16.5 percent. Chief Executive Officer Daniel Hamburger said DeVry is now focused on improving communication with potential students and managing the company’s costs.
Paul Ginocchio, an analyst at Deutsche Bank in San Francisco, lowered his rating on DeVry to “hold” from “buy,” saying he was surprised by the size of the enrollment decline. He also cited a potential deterioration in revenue per student because of the school’s tuition freeze.
DeVry did see new enrollment growth of 16 percent at its Chamberlain College of Nursing and more than 17 percent at its Carrington Colleges group.
Net income in the fiscal third quarter ended March 31 fell 15 percent to $56.8 million, or 88 cents a share, from $67.1 million, or $1, a year earlier. Sales dropped 5.9 percent to $508.7 million.
Profit excluding restructuring and impairment charges among other items was 90 cents a share, topping the 82-cent average of analysts’ estimates compiled by Bloomberg.
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