* Q3 EPS $0.39 vs estimates of $0.28
* Student sign-ups increase 10.5 percent in Q3
* Company forecasts flat sign-ups for Q4
Oct 23 Capella Education Co's student
sign-ups grew for the first time in nearly two years but the
company said it does not expect the growth to continue, hinting
at a choppy recovery for enrollments at for-profit colleges.
The for-profit education industry has struggled to attract
students since a U.S. government scrutiny revealed high student
debt loads and low graduation rates.
New federal rules that were put in place last year, weak
demand and negative publicity have also hurt enrollments.
Student sign-ups at Capella, which offers mainly online
courses, rose 10.5 percent in the quarter ended Sept. 30, after
declining for seven straight quarters.
"While we are encouraged that Capella's business is
stabilizing, we expect continued quarter-to-quarter volatility,"
Chief Financial Officer Steve Polacek said in a statement.
The owner of Capella University said student sign-ups for
the current quarter will be flat as it expects revenue to
decline by 3.5 percent to 4.5 percent, and expenses to rise.
Analysts had expected fourth-quarter revenue to decline 1.8
percent, according to Thomson Reuters I/B/E/S.
The company does not usually provide an earnings forecast
but BMO Capital Markets analyst Jeff Silber said the company's
revenue forecast implies fourth-quarter earnings of between 68
cents and 74 cents per share.
That is also well below analysts' estimates of 92 cents per
Market leader Apollo Group Inc last week said it
would cut about 800 jobs and shut down 25 campuses to save costs
amid declining profit and lower student enrollments.
Capella's net income fell to $5.1 million, or 39 cents per
share, from $9.9 million, or 66 cents per share, a year earlier.
Revenue fell 3 percent to $99.3 million.
Analysts had expected earnings of 28 cents per share on
revenue of $98.4 million.
The Minneapolis-based company's shares, which have gained
about 20 percent since they last reported results in July,
closed at $34.02 on Monday on the Nasdaq.