DOW JONES NEWSWIRES
Apollo Group Inc.'s (APOL) fiscal first-quarter profit rose
one-third as the education company continued to boost
enrollment.
The University of Phoenix owner has benefited over the past few
years as the downturn puts people out of jobs and into classrooms,
both real and virtual. The company also recently got a big worry
off its radar screen with a December agreement to pay $67.5 million
to the Securities and Exchange Commission and $11 million in
plaintiff attorneys' fees to end a long-running dispute over
recruiter compensation.
But Apollo said Thursday the University of Phoenix received
notice from the U.S. Department of Education regarding concerns
about the school's Title IV program policies. The company expects
its liability from the findings will be about $1.5 million. In
addition, Apollo expects to be required to post a $125 million
letter of credit by Jan. 30 to comply with regulations governing
the untimely return of unearned Title IV funds.
The firm's shares were down 4.8%, to $60.89 in after-hours
trading. The stock is down nearly 20% the past year.
For the quarter ended Nov. 30, Apollo reported earnings of
$240.1 million, or $1.54 a share, compared with $180.4 million, or
$1.12 a share, a year earlier. The latest quarter included a 7-cent
gain related to an Internal Revenue Service settlement.
Revenue surged 31%, to $1.27 billion.
Analysts polled by Thomson Reuters projected earnings of $1.46
on revenue of $1.23 billion.
Degreed enrollment grew 18%, to 455,600, while new degreed
enrollment climbed 14%.
-By Jay Miller, Dow Jones Newswires; 212-416-2355;
jay.miller@dowjones.com