Earnings Preview: DeVry Inc. - Analyst Blog
August 10 2011 - 7:53AM
Zacks
DeVry Inc. (DV), one of the world’s leading
providers of educational services, is scheduled to report its
fourth-quarter 2011 financial results on Thursday, August 11, 2011.
The current Zacks Consensus Estimate for the quarter is pegged at
$1.03 a share. The Zacks Consensus Estimate projects $546 million
revenues for the quarter.
Third Quarter 2011 Recap
DeVry, which faces stiff competition from Apollo Group
Inc. (APOL) and Education Management
Corporation (EDMC), revealed strong performance for the
fourth quarter of 2011 as earnings climbed 17.9% from the year ago
earnings to $1.32 per share. However, EPS surpassed the Zacks
Consensus Estimate of $1.23 per share by 7.32%. Earnings were
primarily impacted by successful implementations of growth and
diversification strategies, improvement in academic quality and
successful student enrollment.
Net sales for the quarter jumped 11.6% to $551 million for the
reported quarter driven by 13.2% growth in Business, Technology and
Management, Medical and Healthcare and Professional Education saw a
7.5% growth each.
Fourth-Quarter 2011 Zacks Consensus
Earnings estimates for the fourth quarter of 2011, as provided
by the analysts, range from a low of 93 cents to a high of $1.12.
Thus, the current Zacks Consensus Estimate for the quarter is
pegged at $1.03 per share.
Over the past 30 days, one of the 20 analysts revised the
earnings estimate downward. But the current Zacks Consensus
Estimate remained at $1.03. However, the estimate inched down by
one penny over the last 90 days. The fiscal earnings estimate is
pegged at $4.63, which is one penny higher than the $4.62 per share
estimate made by analysts 60 days ago.
Earnings History Outpaces Zacks
With respect to earnings surprises, DeVry has topped the Zacks
Consensus Estimate in the preceding four quarters. Over the last
four quarters, the earnings surprise ranged from a negative of
5.04% to a positive of 20.73%, with the average earnings surprise
being 10.4%, suggesting that DeVry has outpaced the Zacks Consensus
Estimate.
Recommendation
We are encouraged as DeVry is a leading provider of
post-secondary educational services in North America. Moreover, the
company has a rich experience of more than 75 years in the
education industry and includes strong brands such as DeVry
University and Ross University in its portfolio. The company is
taking initiatives to expand its revenue streams through strategic
acquisitions.
On August 9, 2011 DeVry announced that it has acquired the
business operations of privately held American University of the
Caribbean (AUC). The takeover will provide DeVry an edge in high
quality medical and healthcare education and expand its academic
offerings at the post-baccalaureate level.
However, risks relating to regulatory matters, vulnerability to
seasonal fluctuations and high dependence on government aid
programs are matters of concern.
Currently DeVry holds a Zacks #3 Rank. On a long-term basis, we
maintain a Neutral rating on the stock with a short-term Hold
rating.
APOLLO GROUP (APOL): Free Stock Analysis Report
DEVRY INC (DV): Free Stock Analysis Report
EDUCATION MANAG (EDMC): Free Stock Analysis Report
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