The shares of Apollo Education Group, Inc. jumped 2.24 percent to USD 29.94 today. The world’s largest private education providers reported financial results for the three and nine months that ended on May 31, 2014.
It recorded third quarter revenue of USD 799.9 million and diluted earnings per share of USD 0.59, or USD 0.76 excluding special items. Beating the average estimates of 66 cents per share, the company reported adjusted net income for the third quarter of 76 cents per share.
The new enrollments at the University of Phoenix slumped only 13 percent in the third quarter this year. Experts hold scholarships and a thrust on job-oriented curriculum responsible for the low numbers. They had fallen 16.5 percent in 2013 quarter.
“The enrollment in the quarter totaled 241,900, a 16% decline but ahead of the company’s forecast of 230,000 by August,” said the owner of University of Phoenix.
Greg Cappelli, Chief Executive Officer, Apollo Education Group, said, “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.”
He further said, “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. Our teams are helping students ensure their education is linked to careers in growing areas and are working with employers to address their needs for access to high-quality talent with the most relevant job skills.”
“After a comprehensive national search, we are honored to have Tim Slottow in place as the new president of University of Phoenix, joining us from one of the world’s most respected higher education institutions. Tim shares our commitment to the mission of University of Phoenix, and to delivering a quality education that helps students achieve academic and personal success to meet their individual and professional goals,” Cappelli added.
The company’s net revenue for the third quarter 2014 of USD 799.9 million is comparatively lower than the financial results of 2013. It was USD 946.8 million for the third quarter 2013.
Results for the third quarter 2014:
- USD 16.2 million of contingent consideration charges and acquisition costs.
USD 14.9 million of restructuring and other charges.
- USD 4.1 million charge associated with legal matters.
- USD 11.2 million gain related to foreign indirect taxes following resolution with a taxing authority.
- Operating income was USD 137.1 million compared to USD 195.1 million in the third quarter 2013.
- Net income for the third quarter 2014 was USD 84.9 million or USD 0.76 per share. It was USD 119.1 million or USD 1.05 per share for the third quarter 2013.
Reasons for the positive outlook
According to the industry watchers, investors have started recognizing positive factors into the company, including earnings growth. The positive outlook in the market and building trust among the investors has helped drive up the company’s shares by a sharp 46.22 percent over the past year. The rise has exceeded that of the S&P 500 Index.
Apollo’s upcoming plans
Apollo is mulling over rolling out over 45 certificate programs this year in fields including business, education, IT and healthcare.
The company plans to boost its global presence through acquisitions to offset falling enrollments in the US. It gets about one-eighth of its revenue from outside the United States.
It has acquired 70 percent interest in Australia-based Open Colleges and an 81 percent interest in South Africa-based Milpark Education.
“International is growing and that is certainly helping to offset what is going on in the United States,” First Analysis Securities Corp analyst Corey Greendale said.
It has also cut jobs and shut down campuses to save costs in the United States.