DeVry 1Q profit falls 44 percent
DOWNERS GROVE, Ill. (AP) — DeVry Inc.'s fiscal first-quarter profit fell 44 percent on declining enrollment, but the for-profit education company beat market expectations. Its shares jumped in after-hours trading on the news.
DeVry and other for-profit education companies have struggled for more than a year with the impact of new government regulations and increased scrutiny. Critics say the companies are providing poor education, graduating too few students and burdening many with excessively high debt. The federal government is requiring that schools meet certain criteria or risk losing access to federal student aid, which makes up much of a for-profit education company's revenue.
In turn, companies have stiffened their admission standards. That has taken a toll on enrollment and revenue.
DeVry's future appears to be improving as it has lowered expenses through job reductions and other measures. It also recently acquired a Brazilian school to help improve its revenue and reach. And the company reported Thursday that while its overall enrollment fell 6 percent for the period, enrollment at select schools such as Chamberlin College of Nursing and Carrington Colleges Group were up.
The company cut $27 million in costs during the first quarter, compared with the previous quarter. It also announced plans to sell off some excess administrative office space later this year, for which it expects to record a $9 to $10 million charge during the second quarter.
DeVry CEO Daniel Hamburger said that the company is making solid progress on its plan to improve performance.
The Downers Grove, Ill.-based company's net income fell 44 percent to $32 million, or 49 cents per share, for the quarter that ended Sept. 30. That compares with $57.5 million, or 83 cents per share, a year earlier. Its total revenue fell 7 percent to $482.7 million.
Analysts polled by FactSet were expecting the company to earn 30 cents per share for the period on revenue of $482.5 million.
DeVry's shares jumped 8 percent after-hours, gaining $1.68 to $22.50. Its stock has lost nearly 70 percent of its value since the summer of 2011.