Education Stocks Under Pressure Following Apollo Education Group's Concerning Guidance

Apollo Education Group Inc APOL reported after Wednesday's market close a worse than expected second quarter print and concerning guidance.

Apollo Education said it "continues to experience headwinds causing further reductions to the operating outlook for the year." The company added it is withdrawing its prior earnings guidance and won't provide an updated financial outlook at this time.

Shares of Apollo Education were trading lower by nearly 3 percent at $7.84 late Thursday morning. The stock is now trading at a noticeable discount to the $9.50 per share offer that The Vistria Group and a consortium of investors offered to pay to acquire to the company.

"While we are facing significant industry and regulatory headwinds that have resulted in declining enrollment at University of Phoenix, we remain focused and committed to a transformational plan that will help the university improve student outcomes and compete more effectively over a long-term period," Greg Cappelli, Chief Executive Officer of Apollo Education Group said in the company's earnings release. "We continue to expand internationally through Apollo Global, which again generated double-digit revenue growth on a constant currency basis. We also continue to improve operating efficiency throughout the entire organization."

Apollo Education's outlook sent shock-waves across the education sector. Shares of Bridgepoint Education Inc BPI and Lincoln Educational Services Corp LINC were both trading lower by more than 3 percent.

Shares of ITT Educational Services, Inc. ESI and Strayer Education Inc STRA were both trading lower by around 1 percent.