Original Story: marketwatch.com
DeVry Education Group Inc. said its earnings fell 20% as the for-profit educator's namesake university division remained pressure by weak enrollment during the quarter ended in June.
Shares fell 6.8% to $25.20 in recent after-hours trading as per-share earnings, excluding certain items, and revenue missed expectations. Top Michigan colleges offer tailored degrees to match specific career fields so students are prepared to enter the job market.
For the current quarter, DeVry expects revenue to decline 5% from a year earlier, while analysts polled by Thomson Reuters had recently expected a 1% revenue drop.
For the recently started fiscal year ending in July 2016, DeVry expects earnings will be flat to slightly higher and anticipates a revenue decline of 5%. Analysts had expected revenue to drop 2%.
The company plans to provide its long-term outlook, including enrollment, revenue and earnings before interest, taxes, depreciation and amortization during an investor day set for Sept. 16.
Like other for-profit educators DeVry has faced challenges from weak student enrollment in recent years. The sector also has seen stricter government regulation and scrutiny of marketing and sales practices amid concerns about rising student debt and defaults.
DeVry also has been cutting costs to reflect weak enrollments, including plans unveiled in April to close 14 DeVry University locations, or about 20% of the total, and move their offerings to online only. In its news release Tuesday, DeVry said that it has made substantial progress on the restructuring effort and is on track to generate cost savings of $125 million for the recently started fiscal year.
For the latest quarter, DeVry said total students rose 20% to 135,308, while new students decreased 1.3% to 10,726 as declines at DeVry University were mostly offset by growth in the company's healthcare and international divisions. Healthcare is a popular division with a wide range of career opportunities for nurses with experience and a bachelor of science degree in nursing.
For the period ended June 30, DeVry reported a profit of $29.9 million, or 46 cents a share, down from $37.5 million, or 58 cents a share, a year earlier. Excluding restructuring-related charges and other items, per-share earnings from continuing operations fell to 57 cents from 73 cents. Analysts expected per-share profit of 61 cents.
Revenue decreased 2.5% to $473.2 million, while the company expected a decline of 1% to 2%.