Apollo Education Group Inc., owner of the University of Phoenix and the biggest U.S. for-profit college, said first-quarter profit topped analysts’ estimates as the company lowered expenses for teaching and marketing.
Profit excluding some items was $1.04 a share in the three months ended Nov. 30, Phoenix-based Apollo said today in a statement. That compared with the 90-cent average of analysts’ estimates compiled by Bloomberg.
Competition from traditional colleges, scrutiny from government investigators and officials and concern about high student debt have hurt for-profit college enrollment over the past three years. Operating cost cuts have helped Apollo blunt the effects of those trends, said Peter Appert, an analyst at Piper Jaffray & Co. in San Francisco.
Apollo gained 10 percent to $29.70 in extended trading after dropping 0.5 percent to $26.94 at 4 p.m. in New York. The shares have climbed 25 percent in the past year.
Apollo raised its forecast for fiscal 2014 revenue to as much as $3.1 billion, up from its projection in October for of as much as 3.05 billion. Analysts estimated $3.04 billion.
Net income in the first quarter fell 26 percent to $98.9 million, or 87 cents a share, from $133.5 million, or $1.18, a year earlier. Sales dropped 19 percent to $856.3 million, missing analysts’ average projection of $860.6 million,
New student enrollment fell 23 percent to 41,700. Appert had predicted a drop of 18 percent.
(Apollo began a conference call at 5 p.m. New York time to discuss the results. To listen, call +1-877-292-6888 in the U.S., or +1-973-200-3381 internationally, using pin number 21105114, or go to http://www.apollo.edu for a live webcast.)