Apollo Education Group Q3 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 Wednesday a profit for the third quarter that declined from last year, reflecting lower revenues amid a decline in enrollments.

Adjusted earnings per share topped analysts' expectations, while quarterly revenues missed their estimates. The company also narrowed its revenue outlook range for the full-year 2014.

"We have made meaningful progress on our strategy to differentiate University of Phoenix and all of our institutions, diversify Apollo Education Group, and build a more efficient organization focused on operational excellence," CEO Greg Cappelli said in a statement.

The Phoenix, Arizona-based owner of the University of Phoenix, posted net income of $66.03 million or $0.59 per share for the third quarter, lower than $79.95 million or $0.71 per share in the prior-year quarter.

Excluding items, adjusted net income for the quarter was $84.88 million or $0.76 per share, compared to $119.12 million or $1.05 per share in the year-ago quarter.

On average, 15 analysts polled by Thomson Reuters expected the company to report earnings of $0.66 per share for the quarter. Analysts' estimates typically exclude special items.

Net revenue for the quarter declined to $799.92 million from $946.77 million in the same quarter last year, and missed thirteen Wall Street analysts' consensus estimate of $794.43 million.

Total University of Phoenix revenues declined to $682 million from $843 million, and Apollo Global revenues totaled $100 million, up from $82 million in the year-ago quarter.

University of Phoenix Degreed Enrollment was 241,900 for the quarter, a decline of 15.9 percent from last year, and New Degreed Enrollment fell 12.9 percent to 33,900 from last year. The company attributed the decline in Enrollment to the continuing realignment of the operations of University of Phoenix during the quarter.

"During the third quarter, we continued our plan to realign the University of Phoenix by implementing our college-based strategy and also completed the rollout of our new learning platform across the university. We further expanded our global network to South Africa and are now serving students on six continents through Apollo Global," Cappelli added.

The company also announced that Tim Slottow is joining from one of the world's most respected higher education institutions as the new president of University of Phoenix.

Looking ahead to fiscal 2014, Apollo currently expects revenues in the range of $3.04 billion to $3.06 billion, compared to the prior projection between $3.0 billion and $3.1 billion. Street is currently looking for full-year 2014 revenues of $3.05 billion.

APOL closed Tuesday's regular trading session at $29.28, down $0.45 on a volume of 2.01 million shares.