Reuters: Global Markets: Apollo profit beats, reaffirms FY outlook

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Apollo profit beats, reaffirms FY outlook Mar 26th 2012, 20:51 Mon Mar 26, 2012 4:51pm EDT (Reuters) - Apollo Group Inc (APOL.O) reported a quarterly profit that beat expectations and the largest for-profit college in the United States maintained its 2012 outlook despite a slowdown in student sign-ups. The company also said it was notified by the U.S. Securities and Exchange Commission that an informal inquiry of its revenue recognition practices initiated in 2009 was completed and no enforcement action was recommended. Shares of Apollo, which has beat analyst estimates for at least nine straight quarters -- rose 5 percent in after-market trade on Monday. Apollo, which runs the University of Phoenix, said second-quarter adjusted profit was $73.8 million, or 58 cents per share, down from $118.2 million, or 83 cents per share, a year ago. Revenue fell 8 percent to $969.6 million. Analysts expected earnings of 37 cents a share on revenue of $932.8 million, according to Thomson Reuters I/B/E/S. According to Thomson Reuters Starmine data, earnings per share estimates for Apollo have came down 13 percent since the company warned on second-quarter enrollments on February 28. Apollo had said last month that second-quarter enrollments would take a hit from improving labor market, tough competition and changes in marketing channels. New student enrollments rose 1 percent, down significantly from the 12.7 percent growth seen in the first quarter. The slowdown in enrollment growth is a blow to Apollo, which had returned to growth only last quarter after five straight quarters of decline. Enrollments were then hit by new U.S. government rules on student debt that prompted schools to tighten their admission standards. This in turn led to intense competition among for-profit schools as they were all fighting for the same pool of students who have a higher chance of paying back government debt. (Reporting by A. Ananthalakshmi in Bangalore; Editing by Anil D'Silva and Joyjeet Das) Link this Share this Digg this Email Reprints

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