THE STREET: Strayer, For-Profit Education Companies Suffer Through Supply-and-Demand Lessons

Career College Central Summary:

  • For-profit education companies are learning a tough lesson about supply and demand.
  • Fourth-quarter revenue and student enrollment results released Friday by Strayer Education (STRA – Get Report) suggest these institutions aren't doing well. Investors still holding shares in for-profit education companies are likely to see mainly losses.
  • Strayer, headquartered in Herndon, Va., reported a 6% year-over-year revenue decline for the quarter ending in December. The company said revenue totaled $116.1 million, down from $124 million last year. Revenue was hurt by lower student enrollment and lower revenue per student.
  • The results weren't better on a full-year basis. Strayer generated $446 million in revenue for the year, down 11% year over year from $503.6 million. And 2015 is not starting off strong, either.
  • Strayer said enrollment for the 2015 winter term is down 1%, to 40,728 students. And across its campus and online system, there was a 1% enrollment decline among continuing-education students. New student enrollments were essentially flat year over year, Strayer said.
  • This raises more questions about the long-term viability of this industry, which has been anything but profitable in the last couple of years. Strayer competes with Education Management (EDMC) and Apollo Education (APOL – Get Report) , which runs University of Phoenix.

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