Apollo's 1Q enrollments fall, profit shrinks
PHOENIX (AP) — Apollo Group Inc. reported Tuesday that enrollment at the University of Phoenix fell again in its fiscal first quarter as the for-profit education company struggled to find its footing.
The company also issued a disappointing revenue forecast for the year, and shares fell in after-hours trading.
The for-profit education industry enjoyed a big boom when the recession first hit, but student demand has faded. Increased criticism of the schools, new federal regulations and the still-struggling economy, which limits consumers' ability to spend, has weighed on enrollments. Fewer student sign-ups have dented Apollo's profits, and the company said in October that it was closing 115 of its smaller locations to cope with lower enrollment and plunging profits.
The company said Tuesday that enrollments at the University of Phoenix fell 14 percent to 319,700 in September-November quarter.
Net income fell 11 percent to $133.5 million from $149.3 million the year before. On a per-share basis, earnings grew to $1.18 per share from $1.14 per share because the company has fewer stock outstanding.
After adjusting for restructuring costs, a litigation credit and other special items, it earned $1.22 per share for the period from continuing operations versus $1.26 per share last year.
Revenue dropped 9 percent, to $1.06 billion from $1.17 billion.
Analysts polled by FactSet were expecting the company to earn 90 cents per share on an adjusted basis on revenue of $1.03 billion.
Apollo CEO Greg Cappelli said the company is working on making University of Phoenix stand out from its competitors, including new tools to help students find jobs and working with companies to help them educate their workforce.
Looking forward, the company expects revenue between $3.65 billion to $3.75 billion for the 2013 fiscal year, which ends in August. Analysts had forecast revenue of $3.78 billion for the year.
Shares of the company fell 65 cents, or 3.1 percent, to $20.29 in after-hours trading. The stock fell 56 cents to close regular trading at $20.94, down 63 percent over the past 12 months.