UPDATE 1-ITT Educational profit misses on sliding enrollment

Thu Jul 26, 2012 7:56am EDT

* Q2 EPS $1.96 vs est $2.18

* Revenue $329.8 mln vs est $339.4 mln

* New enrollment down 9.5 pct

* Operating margin down to 23.5 pct

July 26 (Reuters) - ITT Educational Services Inc's quarterly results missed analysts' expectations, as student enrollment at the for-profit college chain continued to decline.

The company, which runs the ITT Technical Institutes and Daniel Webster College, said new student sign-ups fell 9.5 percent to 15,698 new students during the quarter. Total enrollment was down 16 percent to 66,397 students, as of June 30.

Enrollments at for-profit colleges have taken a hit after colleges tightened their admission policies to meet stricter regulatory requirements aimed at reducing student debt.

Prospective students are also getting increasingly averse to the idea of taking on costly education loans, given the high unemployment rates, forcing colleges to spend more on scholarships and other incentives to lure new students.

Operating margin fell to 23.5 percent from 33.5 percent last year.

Net income fell to $46 million, or $1.96 per share for the second-quarter, from $79 million, or $2.85 per share, a year earlier.

Revenue fell 15 percent to $329.8 million.

Analysts were expecting earnings of $2.18 per share on revenue of $339.4 million, according to Thomson Reuters I/B/E/S.

Shares on the company closed at $50.43 on Wednesday on the New York Stock Exchange.

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