Bridgepoint Education 2Q Profit Rises 48%; Shares Down

Bridgepoint Education Inc.’s (BPI) second-quarter earnings rose a better-than-expected 48% as the company continued to benefit from rising enrollments and revenue.

But shares slumped 7.9 % at $23.07 in recent trading despite the mostly strong results, as new-enrollment growth slowed. Even with those declines, the stock is still up 21% so far this year.

Bridgepoint’s new enrollments rose just 3.3% to 19,050 in the latest quarter, far below the double-digit pace in past years. Still, total enrollment as of June 30 was up 25% at 84,545 from 67,744 a year earlier.

Bridgepoint, the parent of Ashford University and University of the Rockies, cut the low end of its prior view for total student enrollment for the year by 2,500, and now expects 79,500 to 83,500.

The company also lowered its 2011 capital spending plans to between 4.5% and 5% of revenue from its earlier forecast for between 5% and 6%.

A company spokesperson wasn’t immediately available to comment.

Bridgepoint is one of the few for-profit school operators that hasn’t reported declines in new-student enrollments. Many institutions are overhauling recruiting and tightening admissions standards in the face of new regulations aimed at ensuring students are being properly educated.

For the second quarter, Bridgepoint reported a profit of $52.1 million, or 90 cents a share, up from $35.3 million, or 58 cents a share, a year earlier. Revenue climbed 38% to $239.9 million. Analysts polled by Thomson Reuters most recently forecast earnings of 69 cents on revenue of $229.7 million.

Operating margin rose to 34.4% from 34.1%.

It also raised its forecast for 2011 earnings and now expects per-share earnings of $2.56 to $2.68, from its May estimate of $2.47 to $2.57.

Late last month, Bridgepoint disclosed that private-equity firm Warburg Pincus LLC, which holds about two-thirds of the company’s outstanding common stock, has registered to resell its entire stake, a move that put the stock under pressure. It was an initial investor in Bridgepoint, helping to launch the company in January 2004, according to a securities filing.


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