DOW JONES NEWSWIRES
Apollo Group Inc. (APOL) swung to a fiscal second-quarter loss
as its BPP legal and financial training group posted $219.9 million
in writedowns, while companywide revenue fell less than expected
and enrollment continued to drop.
The University of Phoenix operator has seen its bottom line hurt
by a shrinking student body and higher marketing expenses of late.
The company tightened admissions standards after it and peers were
criticized for lax practices and poor student-loan repayment rates.
It faces higher advertising costs and more competition in
attracting high-quality students who stand a chance of completing
the programs.
Apollo said Tuesday that University of Phoenix degreed
enrollment dropped 12% to 405,300 in the latest quarter as new
enrollment plunged 45%.
For the quarter ended Feb. 28, Apollo reported a loss of $64
million, or 45 cents a share, compared with a year-earlier profit
of $92.6 million, or 60 cents a share. Excluding the writedown and
estimated litigation losses, earnings from continuing operations
dipped to 83 cents from 84 cents. Revenue slid 2% to $1.05
billion.
Analysts polled by Thomson Reuters most recently predicted
earnings of 69 cents on $1.03 billion in revenue.
Expenses jumped 19% amid the writedown and higher marketing,
overhead and instructional and student advisory costs.
Shares closed Monday at $42.35 and were inactive in recent
premarket trading.
-By Matt Jarzemsky, Dow Jones Newswires; 212-416-2240;
matthew.jarzemsky@dowjones.com