Apollo Education Group Q1 Adj Profit Tops View, But Revenues Miss

(RTTNews) - Private education provider Apollo Education Group, Inc. (APOL), formerly known as Apollo Group, Inc. until November 2013, reported Thursday a profit for the first quarter that declined from last year, reflecting lower revenues amid a decline in enrollments.

Adjusted earnings per share from continuing operations topped analysts' expectations, while quarterly revenues missed their estimates. The company also provided revenue guidance for the second quarter, below Street view, and trimmed revenue outlook for the full-year 2015.

Following the announcement, the company shares are plunging nearly thirteen percent in pre-market trading.

"Apollo Education Group is committed to leading the positive transformation of higher education to more effectively connect students' education with their career aspirations," CEO Greg Cappelli said in a statement.

The Phoenix, Arizona-based owner of the University of Phoenix, posted net income from continuing operations of $32.47 million or $0.31 per share for the first quarter, sharply lower than $99.43 million or $0.87 per share in the prior-year quarter.

Excluding items, adjusted net income from continuing operations for the quarter was $47.80 million or $0.44 per share, compared to $119.11 million or $1.05 per share in the year-ago quarter.

On average, 12 analysts polled by Thomson Reuters expected the company to report earnings of $0.42 per share for the quarter. Analysts' estimates typically exclude special items.

Net revenue for the quarter declined to $719.05 million from $848.15 million in the same quarter last year, and missed ten Wall Street analysts' consensus estimate of $728.01 million.

Total University of Phoenix revenues declined to $593 million from $745 million, while Apollo Global revenues totaled $115 million, up from $91 million in the year-ago quarter.

University of Phoenix Degreed Enrollment was 227,400 for the quarter, a decline of 13.5 percent from last year, and New Degreed Enrollment decreased 5.0 percent to 39,600 from last year.

"Our strategy is designed to provide an outstanding student experience through innovative and engaging curriculum delivered with a focus on meeting the needs of today's busy working learners. We also are dedicated to helping employers identify, recruit and develop a more skilled workforce globally," Cappelli added.

Looking ahead to the second quarter, the company projects net revenue in a range of $580 million to $595 million, while analysts are currently expecting it to report revenues of $610.51 million.

For fiscal 2015, Apollo trimmed its revenue guidance to a range of $2.74 billion to $2.80 billion from the prior projection between $2.80 billion and $2.85 billion. Street is currently looking for full-year 2015 revenues of $2.81 billion.

APOL closed Wednesday's regular trading session at $31.86, down $0.33 on a volume of 2.28 million shares.