* Third-quarter EPS forecast $0.04-$0.06 vs est $0.13
* Second-quarter EPS from continuing operations $0.05 vs est
* Says received subpoena from the California Attorney
* Shares down as much as 5 pct
Jan 31 For-profit education provider Corinthian
Colleges Inc forecast a lower-than-expected
third-quarter profit, saying it expects a 4 percent to 6 percent
fall in new student sign-ups.
Corinthian's shares, which gained 7 percent in the three
months to Wednesday's close, were down 5 percent at $2.50 on the
The company's second-quarter results also missed
expectations as new student enrollments fell by more than 4
percent to 23,703.
Enrollments at Corinthian have taken a hit since the U.S.
government started a crackdown on for-profit colleges over high
student debt two years ago.
U.S. colleges were forced to change their practices after
the government introduced new rules that would cut financial aid
if student debt remained high.
Corinthian on Thursday said it received a subpoena from the
California Attorney General, requiring it to produce documents
related to matters such as default rates, marketing, admissions,
enrollment and financial aid processes.
In November, the U.S. Department of Education gave
Corinthian a financial responsibility score below the minimum
requirement the company needs to allow its students access to
federal student loans.
If Corinthian is unable to convince the department to
reconsider its score, it will be forced to post a letter of
credit with the department equivalent to at least $175.7
million, depending on the level of monitoring it is willing to
Corinthian said the matter is still being reviewed and it is
pursuing alternative sources of financing to be able to post a
letter of credit, if required.
Corinthian reported earnings from continuing operations of
$4.3 million, or 5 cents per share, in the second quarter, up
from $3.9 million, or 5 cents per share, a year earlier.
Analysts on average were expecting earnings of 6 cents per
share, according to Thomson Reuters I/B/E/S.
For the third quarter, the company forecast earnings of 4 to
6 cents per share, on revenue of between $400 million and $410
million. Analysts on average were looking for 13 cents per share
and revenue of $422.5 million.