Education Management Slides Most Since 2009 After ForecastLisa Wolfson
Education Management Corp., the for-profit college operator partly owned by Goldman Sachs Group Inc., tumbled the most since October 2009 after it forecast a loss for this quarter.
The loss for the fiscal fourth quarter that ends in June will be 14 cents to 17 cents a share, Pittsburgh-based Education Management said yesterday in a statement. That compares with an average of a 3-cent profit from eight analyst estimates compiled by Bloomberg.
Enrollment at for-profit colleges has been hurt by years of federal and state investigations into their marketing and recruitment practices. Education Management is among such companies that have said this year they’ve received demands for information from a network of state attorneys general.
“The current operating conditions continue to be challenging,” Chief Executive Officer Edward West said in the statement.
Education Management sank 28 percent to $2.84 at the close in New York. The shares have declined 72 percent this year.
Enrollment trends at the Art Institutes unit led the company to write down the value of goodwill and assets by $509.2 million in the third quarter. Across all its schools, new student signups fell 9.8 percent in the three months ended March 31, wider than the 2.4 percent decline estimated by Jeffrey Silber, an analyst at BMO Capital Markets in New York.
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