Apollo Group Q1 Profit Down, But Tops Street - Update

(RTTNews) - Private education provider Apollo Education Group Inc. (APOL), Tuesday reported a drop in profit for the first quarter, as revenues continued to decline on lower enrollments. Nonetheless, earnings for the quarter topped Wall Street estimates as expenses declined, while revenues fell short of estimates.

For profit education companies in US continue to struggle as lower number of students enroll due to the fear of high student loan debt amidst the high unemployment rate in the country. Degreed enrollment at the University of Phoenix dropped 17.7 percent, while new degreed enrollment decreased 22.9 percent.

Apollo Group, which owns the University of Phoenix said its revenues for quarter dropped to $856.34 million from $1.06 billion last year quarter. Thirteen analysts polled by Thomson Reuters expected revenues of $860.58 million for the quarter.

Lower tutoring and marketing expenses for the quarter helped the company partially offset revenue decline. Instructional and student advisory expenses dropped to $339.7 million from $432.2 million last year. Marketing costs declined to $137.8 million from $162.9 million a year ago.

Phoenix, Arizona-based Apollo's first-quarter profit dropped to $98.9 million or $0.87 per share from $133.5 million or $1.18 per share last year.

Adjusted income dropped to $118.7 million or $1.04 per share from $137.9 million or $1.22 per share last year. On average, 17 analysts expected earnings of $0.90 per share for the quarter. Analysts' estimates typically exclude special items.

Commenting on the results, Chief Executive Greg Cappelli said, "At Apollo Education Group, we are making good progress on our strategic plan to differentiate University of Phoenix, diversify Apollo and drive operational excellence throughout our organization."

For the fiscal year 2014, the company now expect revenues in the range of $3.0 billion to $3.1 billion, compared to prior estimates of $2.95 billion to $3.05 billion. Analysts currently see revenues of $3.04 billion for the year.

APOL closed Tuesday's trading at $26.93, down $0.13 or 0.46%, on the Nasdaq. The stock, however gained $0.67 or 2.47% in after-hours trade.