DOW JONES NEWSWIRES Apollo Group Inc.'s (APOL) fiscal third-quarter adjusted profit fell less than expected on a big drop in expenses, while the for-profit education company's unadjusted bottom line rose 18% on a tax benefit and less pain from lawsuit charges. Shares were up 5% at $45.61 after hours. In November, the stock hit its lowest level since the onset of the recession, and shares had risen 29% from that point through the close. The University of Phoenix operator Thursday said degreed enrollment there fell 16%, a faster clip sequentially, to 398,400 in the latest quarter, while new enrollment dropped 41%. Its profitability has suffered recently from a waning student body and higher expenses, and Apollo swung into the red in the prior quarter because of writedowns at its British school, BPP, a legal and financial training group. It has also tightened admission standards after criticism about poor student-loan repayment rates, although a U.S. Education Department final rule about programs that graduate students with heavy debt loads was less stringent than a draft version. Apollo previously has said that declining new enrollments would be felt financially more in next year's results, but it has also said it expects the enrollments to return to growth then too. For the quarter ended May 31, the company Thursday reported a profit of $212.4 million, or $1.51 a share, from $179.3 million, or $1.18 a share, a year earlier. The latest results included a moderate charge related to a lawsuit and a tax benefit, while the previous year's results included larger charges and writedowns from the suit. Excluding items, earnings from continuing operations fell to $1.45 a share from $1.74. Revenue decreased 7.6% to $1.24 billion. Analysts surveyed by Thomson Reuters predicted $1.33 a share on revenue of $1.2 billion. Operating margin rose to 28% from 22.6% as expenses dropped 14%. The company largely kept is outlooks for this and the coming fiscal years untouched, though it said operating income this year would be at the low end of its previous target range, coming in at $1.15 billion to $1.2 billion Thursday. -By Joan E. Solsman, Dow Jones Newswires; 212-416-2291; joan.solsman@dowjones.com
