Education companies gained in U.S. stock trading after Apollo Group Inc., the biggest for-profit college operator, reported quarterly results that were higher than analysts estimated.
Apollo rose $2.92, or 8.1 percent, to $38.86 at 10:10 a.m. New York time in Nasdaq Stock Market composite trading after the company said fiscal first-quarter profit excluding one-time items was $1.63 a share, beating the $1.35 average estimate of 21 analysts surveyed by Bloomberg. An index of 13 for-profit colleges gained 2.6 percent.
Apollo, the Phoenix-based operator of the University of Phoenix, also said yesterday that the number of new students signing up for classes declined 42 percent to 56,500, from 98,100 a year earlier, after the company began allowing applicants to sample courses before paying to register. Apollo is cutting recruitment staff and working to manage bad debt expense, company officials said yesterday on a conference call with analysts and investors.
“We are encouraged that the cost of positioning the company for future success is not worse than expected given industry trends,” said Jarrel Price, an analyst with Height Analytics in Washington who doesn’t rate the shares, in a note to clients today.
Net income for the three months ended Nov. 30 fell 1.9 percent to $235.7 million, or $1.61 a share, from $240.1 million, or $1.54, a year earlier, Apollo said yesterday in a statement.
Education Management Corp., based in Pittsburgh, gained 17 cents, or 1.2 percent, to $13.85. DeVry Inc., based in Downers Grove, Illinois, gained 57 cents, or 1.3 percent, to $43.38 on the New York Stock Exchange.
© Copyright 2015 Bloomberg News. All rights reserved.