Education Management Shares Plunged: What You Need to Know

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes — just in case they're material to our investing thesis.

What: Shareholders of for-profit education company Education Management (Nasdaq: EDMC ) are smarting today, with their stock plunging as much as 22% following release of its second-quarter results.

So what: There's no way to sugarcoat it; these results were ugly! For the quarter, the company, which runs Art Institutes, Argosy University, and Brown Mackie Colleges, noted a 5% drop in student enrollments and saw profits fall to $0.49 from $0.61 in the year-ago period. Since its January quarter began, the company also pointed to a worsening 9% drop in student enrollment highlighted by an 18.5% drop in enrollments for fully online courses. For the trifecta, Education Management lowered its fiscal 2012 EPS range to $1.11-$1.15, which is markedly lower than its previous forecast of $1.34-$1.40.

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THE MOTLEY FOOL

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