DeVry Swings to Loss
February 04 2016 - 5:40PM
Dow Jones News
DeVry Education Group Inc. swung to an unexpected loss for the
latest quarter, mostly owing to a big asset write-down of its
Carrington College, which is part of the for-profit education
company's medical and health-care segment.
Still, shares rose 1.4% to $19.33 in recent after-hours trading
as per-share earnings from continuing operations, excluding
one-time items, edged past expectations.
For the fiscal year ending in June, the company lowered its
profit outlook and now expects earnings excluding certain one-time
items to decrease by 5% to 6%. DeVry previously had expected
earnings, excluding certain one-time items, between flat and a
slight increase. The company also projected a revenue decline
between 4% and 5%, compared with its previous estimate for a
decrease of about 5%.
For the current quarter, DeVry also projected a revenue drop of
4% to 5%. Analysts polled by Thomson Reuters had been looking for a
revenue decrease of 5%.
In recent years, for-profit educators such as DeVry have seen
enrollment slide amid scrutiny of their recruiting, career outcomes
and student-loan default rates. Last week, the Federal Trade
Commission, one of several agencies investigating the sector, sued
DeVry Education on accusations the company ran false television and
online advertisements about the employment success and earnings of
its graduates. DeVry has denied the allegations.
On Thursday, the Downers Grove, Ill., company reported total new
enrollments fell 9.8% to 10,901 but total enrollment grew 15% to
138,934.
For the period ended Dec. 31, DeVry reported a loss of $50.6
million, or 79 cents a share, compared with a year-earlier profit
of $42.4 million, or 65 cents a share. Excluding asset write-downs,
restructuring-related expenses and other items, per-share earnings
from continuing operations fell to 68 cents from 75 cents. Analysts
polled by Thomson Reuters expected per-share profit of 67
cents.
Revenue decreased 5.9% to $456.2 million. The company expected a
revenue decline of roughly 6% amid the restructuring at DeVry
University and currency effects at its Brazil unit.
The latest quarter included an $86 million after-tax write-down
related to DeVry's Carrington College amid lower-than-expected
operating results and weaker enrollments. Carrington's revenue fell
0.5% in the December quarter. The number of new students fell 4.8%
and total enrollment dropped 3.1%.
Write to Tess Stynes at tess.stynes@wsj.com
(END) Dow Jones Newswires
February 04, 2016 17:25 ET (22:25 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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