DOW JONES NEWSWIRES
Apollo Group Inc.'s (APOL) fiscal first-quarter earnings fell
2%, though adjusted per-share earnings rose and topped analysts'
views, as the for-profit education company's margins fell but
revenue increased.
Shares jumped 10% after hours to $39.57. As of the close, the
stock had fallen 41% in the past year.
Apollo, which operates the University of Phoenix, has posted
lower earnings for the past few quarters. The for-profit education
industry also faces new regulatory hurdles amid more scrutiny from
the U.S. Department of Education. In November, the Education
Department said it would review the University of Phoenix's
financial-aid programs from recent periods.
Apollo in October said that challenges facing the industry,
including "regulatory and other scrutiny" and "heightened media
attention, much of which has portrayed the sector in an
unflattering light," would "adversely impact" financial
results.
For the quarter ended Nov. 30, Apollo reported a profit of
$235.4 million, down from $240.1 million a year earlier. On a
per-share basis, profit rose to $1.61 from $1.54 as the number of
shares outstanding decreased 6%. Excluding items such as
restructuring costs and a tax benefit, earnings rose to $1.63 a
share from $1.47.
Revenue rose 5.4% to $1.33 billion, helped by what the company
called "selective" tuition increases at the University of
Phoenix.
Analysts polled by Thomson Reuters had most recently forecast
earnings of $1.35 on $1.26 billion in revenue.
Operating margin fell to 30.7% from 31.2%. Degreed enrollment
fell 3.8%.
-By Nathan Becker, Dow Jones Newswires; 212-416-2855;
nathan.becker@dowjones.com;