Apollo Drops Most in More Than 20 Years as New Enrollment Slumps

Apollo Education Group Inc., owner of the for-profit University of Phoenix, tumbled the most since its market debut more than two decades ago after cutting its annual revenue forecast amid slumping student enrollment.

Apollo, which has been trying to reverse sign-up losses by revamping online offerings, said the number of new students registering for courses in the quarter that ended Feb. 28 fell 13 percent to 28,300. The shares slid 28 percent to $20.04 at the close in New York, marking the biggest one-day decline since the company went public in 1994. The stock is down 41 percent for the year.

Software compatibility problems with Apollo’s online classroom continue to cause “disruption” and might have prompted some students to stop taking courses, the Phoenix-based company said Wednesday. Apollo also cut spending on marketing, while it saw increased advertising from competitors, Chairman and Chief Executive Officer Gregory Cappelli said Wednesday on a conference call.

“We adjusted our marketing type and spend, as well as our contact strategies this quarter,” he said on the call. “We’re on track to fix the technology platform issues, which we believe adversely impacted retention.”

Revenue for the year ending in August will be $2.63 billion to $2.68 billion, Apollo said. The company had previously forecast sales of $2.74 billion to $2.8 billion.

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