WALL STREET JOURNAL: Apollo Education Swings to Loss as Enrollment Declines

Career College Central Summary:

Apollo Education Group Inc. swung to a loss in the quarter ended in February as continued enrollment declines contributed to a bigger-than-expected revenue drop.
Shares of the for-profit education company fell 16% to $23.39 in premarket trading as its outlook for the current quarter came in below expectations.
The company has seen its enrollment numbers pressured as stricter regulation has reduced for-profit colleges’ share of U.S. financial aid for students that such schools depend on for most of their revenue.
Also, an Obama administration initiative announced around the time Apollo last released quarterly results would make community college free for many students. Those schools compete directly with Apollo’s flagship University of Phoenix.
During the quarter ended Feb. 28, new enrollments at University of Phoenix fell 13% to 28,300, while total enrollments decreased 15% to 213,800.
In a research note, BMO Capital Markets said that new enrollments at University of Phoenix came in below its expectations for a decline of 4.5%. The decline in total enrollment was also deeper than its expectations for decrease of 13%.
BMO also said the declines in the latest period were bigger than the year-to-year decreases of 5% for new enrollment and 14% for total enrollment the company reported for the previous quarter.
In all, Apollo reported a quarterly loss of $33.6 million, or 31 cents a share, compared with a year-earlier profit of $14.6 million, or 13 cents a share. Excluding items such as restructuring-related charges and write-downs, the per-share loss was 10 cents, compared with a year-earlier profit of 30 cents.

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WALL STREET JOURNAL