Tags: Apollo Group | APOL | DeVry Inc. | DV | Strayer Education | STRA | Career Education Corp.

Apollo Group Riding Education Storm

By Dan Weil   |   Monday, 18 Jul 2011 10:52 AM

Apollo Group (APOL) represents one of the world’s top for-profit education companies. Its University of Phoenix brand ranks as the biggest for-profit college by enrollment. Apollo Group shares soared 18 percent higher in the first half of the year, beating the 11 percent gain for the Bloomberg For-Profit Education Index.

The company offers courses at more than 200 learning centers in the United States and over the Internet to students around the world. Apollo is weathering the storm of new government regulations designed to improve enrollment practices and debt repayment rates of students, though the company has taken some hits.

The federal government has established stricter standards for student aid, the biggest source of revenue for private colleges. But its final rule, published in June, was less strict than its initial proposal.

Apollo Group profits, excluding one-time items, totaled $1.45 per share in the fiscal third quarter ended May 31, beating the $1.34 average forecast of analysts polled by Bloomberg.

Revenue registered $1.24 billion, topping analysts’ estimate of $1.2 billion. But that amounted to a 7.5 percent drop from a year earlier. Net income rose 18 percent, to $212.4 million from $179.3 million a year earlier.

Student enrollment slid 16 percent, with new enrollment dropping 41 percent. Tuition increases made up for some of that loss.

Widening gap

Apollo’s enrollment is likely to expand in the future, thanks to population growth, the continued shift of the U.S. economy to services from manufacturing, and the widening wage gap between those with a college degree and those without, contend analysts at Zacks Investment Research.

The company’s 35 years of experience give it a “hard-to-replicate competitive advantage,” they maintain. However, Apollo Group faces intense competition from DeVry (DV), Strayer Education (STRA), and Career Education Corp. (CECO), they note.


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Apollo Group (APOL) represents one of the world s top for-profit education companies. Its University of Phoenix brand ranks as the biggest for-profit college by enrollment. Apollo Group shares soared 18 percent higher in the first half of the year, beating the 11 percent...
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