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Apollo Group cuts distinction forecast, sign-ups trip again

Tue Jan 8, 2013 5:50pm EST

(Reuters) – Apollo Group Inc (APOL.O), that owns a biggest U.S. for-profit college, reported reduce tyro sign-ups for a third true entertain and cut a handling distinction foresee for 2013.

Apollo, that runs a University of Phoenix, now expects handling income of between $500 million and $550 million for a year finale Aug 2013, down from a before foresee of $525 million to $575 million.

“They are going to see some-more cost assets than they had expected, though nonetheless now they’re awaiting reduce profit, so something bizarre is going on there,” William Blair Co researcher Brandon Dobell said.

Apollo pronounced in Oct that it would cut 800 jobs and close down 25 campuses to save costs, as fewer students sealed adult during a colleges.

“During a initial quarter, we achieved most of a approaching 2012 bound cost assets — progressing than expected,” Chief Financial Officer Brian Swartz pronounced on a post-earnings discussion call on Tuesday.

General costs fell 8 percent in a initial quarter.

“We now design to comprehend during slightest two-thirds of a annual cost assets in mercantile 2013,” Swartz added.

For-profit preparation providers have been tormented by descending enrollments over a final dual years in a face of tighter regulations and low job-placement rates.

U.S. colleges were forced to concentration some-more on a peculiarity of preparation after a supervision introduced new manners that threatened to cut financial assist if debt loads remained high.

The company’s University of Phoenix has also ramped adult a spend on selling and solidified fee fees to lure students to pointer up.

New tyro enrollments fell 15 percent to 54,100 in a initial entertain finished November.

CFO Swartz also pronounced new tyro enrollments in Dec did not accommodate Apollo’s expectations.

The association had pronounced final year that it approaching new enrollments to grow again in a second half of 2013.

Net income attributable to Apollo fell to $133.5 million from $149.3 million a year earlier.

However, a company’s attributable net income per share rose to $1.18 from $1.14 as Apollo bought behind some of a shares.

Excluding items, a association warranted $1.22 per share.

Revenue fell 10 percent to $1.06 billion.

The company’s shares were down about 6 percent after a bell. They sealed down 3 percent during $20.94 on Tuesday on a Nasdaq. The batch has forsaken some-more than 60 percent over a past year.

(Reporting by Sagarika Jaisinghani in Bangalore; Editing by Roshni Menon)

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