For-Profit Education Sector Falls on Apollo Group's Earnings
The for-profit education sector added to steep losses that it has sustained over the last year on Wednesday after Apollo Group (NASDAQ: APOL), the owner of the University of Phoenix, released its fiscal first-quarter earnings.
The company's first-quarter earnings and sales were ahead of Wall Street estimates, but it lowered the top end of its full-year revenue range. The stock was last down around 7 percent to $19.49.
The disappointment over Apollo's guidance has spilled over into the entire sector with most for-profit names falling on the day. Among the biggest losers was DeVry (NYSE: DV), which traded down more than 6 percent to $23.63.
Shares of ITT Educational Services (NYSE: ESI) were last trading down more than 4 percent to $14.54 and small-cap name Corinthian Colleges had lost a little more than 4 percent to $2.55.
Apollo's Chief Executive Officer Greg Cappelli said in the wake of his company's results "In the first quarter, we continued to execute on our strategy to differentiate University of Phoenix, diversify Apollo Group and to further optimize our operations."
The company reported adjusted earnings from continuing operations of $1.22 per share versus $1.26 per share, in the year ago period. This came in ahead of Wall Street analysts' consensus EPS estimates of $0.90.
Revenues in the period were $1.06 billion versus $1.17 billion last year. This also came in ahead of analysts' consensus estimates of $1.03 billion.
Looking ahead, the company provided full-year 2013 revenue guidance of $3.65 billion to $3.75 billion. This was below its prior estimate of $3.65 billion to $3.80 billion.
Currently, Wall Street analysts are projecting that Apollo will report revenue of $3.77 billion in 2013. The lighter revenue guidance was likely the reason for the sell-off in the stock in Tuesday's after hours.
Over the last year, APOL has lost more than 65 percent as the private education industry has been struggling with falling enrollment rates.
© 2016 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.