By any measure, Career Education Corp., the Schaumburg-based company that runs for-profit colleges with about 100,000 students, has endured a very bad year.
Student enrollment and revenue plummeted, and profits disappeared. Career Ed admitted that some of its colleges cooked the books on student job-placement rates, and its chief executive left in the wake of the scandal. The company is under investigation by the New York attorney general and by accreditors.
Then, on Tuesday, when the Dow Jones industrial average closed above 13,000 for the first time since 2008, shares of Career Education got crushed, losing 19 percent in one day.
Although for-profit colleges in general have been under fire — from student and consumer groups, Congress and the Department of Education — Career Education has suffered more than most. Career Education's total student population dropped 14 percent in 2011, and the number of new students enrolling dropped 24 percent. The company lost $120 million in the September-to-December quarter.
The pain will continue, at least in the short term, interim CEO Steven Lesnik conceded last week during a conference call with stock analysts. "2012 is going to be a transitional and somewhat difficult year for us," he said.
Still, Lesnik has hope. Career Ed's top brass has a new strategic plan and is shaking things up at the company, which runs the American InterContinental University, Le Cordon Bleu North America and Sanford-Brown colleges, among others. They have already shuffled some management positions and will probably close some schools and rebrand others so the company doesn't have so many different college names. And they say the school has a new focus on the welfare of students.
"We, like many of the other companies, have taken a good many hits both in Washington and with some of the general media over the past year," Lesnik said during the call.
Click through for full article text.