Apollo Education's profit beats on cost cuts
(Reuters) - Apollo Education Group Inc (APOL.O), owner of the University of Phoenix, reported a quarterly profit well ahead of Wall Street expectations, proof that the company's restructuring efforts were helping to shore up its bottom line.
Apollo shares rose 11 percent in extended trading after the company posted adjusted earnings of $1.04 per share, 14 cents ahead of what analysts had expected.
The company has shut several campuses and learning centers since late 2012 as it looks to save costs in the face of declining student enrollments.
Apollo Chief Financial Officer Brian Swartz said in a post earnings call that the company was now targeting $325 million in further cost savings in 2014.
The U.S. for-profit education industry has struggled with issues ranging from government scrutiny that revealed fraud related to financial aid, to worryingly high student debt loads, and low rates of graduation and job placement.
Enrollments have taken a beating as colleges were forced to change policies to focus more on the quality of education or risk losing access to federal student financial aid.
New student enrollments fell 23 percent to 41,700 in Apollo's universities in the first quarter ended November 30.
Net income in the quarter fell to $98.9 million, or 87 cents per share, from $133.5 million, or $1.18 per share, a year earlier.
Revenue fell 18.8 percent to $856.3 million, slightly below analysts' expectations of $860.6 million, according to Thomson Reuters I/B/E/S.
The company also marginally raised its full-year revenue outlook range to $3.0-$3.1 billion, up from the $2.95-$3.05 billion it had forecast in October.
Apollo shares, which have risen 29 percent since the company reported strong fourth quarter results in October, were trading at $29.79 after the bell. They closed at $26.94 on the Nasdaq on Tuesday.
(Reporting by Mridhula Raghavan in Bangalore; Editing by Maju Samuel, Anthony Kurian)
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