UPDATE 2-ITT Education Q2 results beat Wall Street; ups outlook

(Recasts, adds analyst comments, updates share movement)

By Amulya Nagaraj

BANGALORE, July 24 (Reuters) - ITT Educational Services Inc (ESI.N: Quote, Profile, Research, Stock Buzz), a for-profit education company, posted a 31 percent growth in quarterly profit that beat market estimates, helped by higher students enrollments, and raised its earnings outlook for 2008, sending its shares up as much as 10 percent.

The company said new student enrollment rose 22.5 percent to 14,751 in the second quarter.

The weak economy was partially responsible for the rise in enrollment rates as higher education becomes more appealing, analyst Alexander Paris Jr of Barrington Research said from Chicago.

About 80 percent of the enrollment at ITT is short-term associate degree programs, he said.

However, analyst Trace Urdan from Signal Hill Group said the company may not be able to sustain the new student enrollment growth.

ITT's short-term, technical-oriented programs see more enrollment during a weak economy, he said.

The company is also expected to benefit from the recent changes in the federal loan program, Urdan said.