Apollo Group Inc. (APOL) swung to a fiscal second-quarter profit on higher enrollment as well as a prior-year litigation charge.

However, shares recently fell about 5.66% to $73.95 in after-hours trading from the Tuesday close of $78.33, despite the results topping Wall Street's expectations.

In the conference call, some analysts raised concerns about the company's bad debt expense, which increased to 4.1% in the fiscal second quarter, from 3.8% a year ago.

The company attributed some of the increase to the difficulty in collecting payments from drop-out students given the tougher economy, and said it was possible that is bad-debt expense could continue to increase in the near term.

"We are trying to manage that as best as we can," said Brian Swartz, the company's newly promoted Chief Financial Officer, in the company's earnings call.

Still, Signal Hill analyst Trace Urdan says the bad-debt expense increase shouldn't be ringing any alarm bells just yet, as Apollo's 4.1% is still right around the mean for-profit education group.

"I'm not too worried," Urdan said.

In general, for-profit educators such as Apollo generally have benefited from the slumping economy, as rising unemployment has prompted increased interest in retraining and continued education.

In addition, Apollo has boosted marketing efforts and repositioned its brand, added degree programs with broad appeal and hired more enrollment counselors, investments its executives said would continue moving forward.

"We are pleased with the growth in revenue and enrollments in our second quarter and we believe we are continuing to benefit from investments we are making in key academic and operational areas," said Chief Executive Charles B. Edelstein in a statement.

Some have also worried the slumping economy could cause some companies to reduce corporate tuition reimbursement, which provides about one-fifth of Apollo's annual revenue. But the company hasn't yet observed any significant slowdown, its executives said in the earnings call.

For the quarter ended Feb. 28, the operator of the University of Phoenix reported net income of $125.3 million, or 77 cents a share, compared with a net loss of $32 million, or 19 cents a share, a year earlier.

The prior-year quarter's results included a $168.4 million pretax charge for estimated damages stemming from a securities class-action lawsuit. That charge was later reversed after a federal judge overturned a securities-fraud verdict that could have forced the company to pay out as much as $280 million.

Revenue climbed to $876.1 million from $693.6 million.

Analysts' estimates were for earnings of 65 cents a share on revenue of $865.5 million, according to a poll by Thomson Reuters.

Degreed enrollment grew 20% to 397,700 at the University of Phoenix, the nation's largest private university, and new degreed enrollment climbed 23%.

New degreed enrollment trailed the 25.6% boost seen in the fiscal first quarter, but the company's management previously said it didn't expect enrollment increases to continue at the same significant clip.

Instructional costs and services grew 14% while selling and promotional expenses increased 12%. General and administrative expenses climbed 29%.

The company also announced Tuesday promotions for several executives. Chief Financial Officer Joseph L. D'Amico was named to the new position of chief operating officer and will be replaced as finance chief by Chief Accounting Officer Brian L. Swartz. Controller Gregory J. Iverson will become chief accounting officer.

Apollo's stock price soared 95% in the past year but has fallen 18% from its 52-week high in January, at least in part due to some short-selling activity in the for-profit education sector.

-By Kelly Nolan; Dow Jones Newswires; 201-938-4049; kelly.nolan@dowjones.com

(Kathy Shwiff contributed to this report)