Apollo Group Inc.'s (APOL) fiscal second-quarter earnings fell
26% amid a $44.5 million class-action lawsuit charge, but
enrollment and revenue rose and earnings topped analysts'
expectations.
The University of Phoenix operator also forecast third-quarter
earnings of $1.55 a share on revenue of $1.3 billion. Analysts
surveyed by Thomson Reuters expected $1.45 and $1.28 billion,
respectively.
Like many other for-profit educators, Apollo has seen strong
results recently as the recession has put people out of jobs and
back into classrooms, both real and virtual, boosting enrollment.
But the company warned in February that its results may be lower
than expected as its bad-debt expense is higher than in recent
quarters. It rose 6.9% of revenue in the latest period from 4.1% a
year earlier as the economic downturn led to lower collection
rates.
For the quarter ended Feb. 28, Apollo reported a profit of $92.6
million, or 60 cents a share, down from $125.3 million, or 77
cents, a year earlier. Excluding the lawsuit charge and other
items, earnings rose to 84 cents from 79 cents as revenue jumped
23% to $1.07 billion.
Analysts had most recently forecast earnings of 81 cents on
$1.07 billion in revenue.
The company said its degreed enrollment rose 15%, while new
enrollment climbed 9.4%.
Shares closed at $61.28 Friday and were inactive premarket. The
stock has fallen 20% in the past year.
-By Nathan Becker, Dow Jones Newswires; 212-416-2855;
nathan.becker@dowjones.com