Watch Interview With Kansas City Fed President Esther George on Mornings with Maria on Fox Business at 7:30 ET

Dismiss

Apollo's 2Q Net Tumbles 79%, Tops Views

By Markets FOXBusiness

For-profit education company Apollo Group (APOL) revealed a 79% plunge in fiscal second-quarter profits on Monday amid slumping enrollment, but the results from the parent of the University of Phoenix easily exceeded expectations.

Continue Reading Below

Shares of the education company surged 10% on the earnings beat and in-line guidance for the full year.

Apollo said it earned $13.5 million, or 12 cents a share, last quarter, compared with a profit of $63.9 million, or 51 cents a share, a year earlier.

Excluding one-time items, it earned 34 cents a share, down from 57 cents a year earlier, but nearly doubling the Street’s view of 18 cents.

Revenue slid 13% to $834.4 million, topping consensus calls from analysts for $823 million. Operating margins tumbled to 3.6% from 10.8%.

More On This...

Enrollment at the University of Phoenix dropped 15.5% year-over-year to 300,800, while new degreed enrollment slumped 20.1%.

Continue Reading Below

Looking ahead, Apollo forecasted net revenue of $3.65 billion to $3.75 billion for fiscal 2013, compared with the Street’s view of $3.73 billion.

Operating income, excluding one-time items and restructuring charges, is seen ranging between $500 million and $550 million.

“Higher education is rapidly evolving as workforce demands and technological innovations drive change in our global economy," CEO Greg Cappelli said in a statement.

During a conference call with analysts, Apollo also revealed that it has started workforce reductions of about 1,000 positions in fiscal 2013.

Apollo also said its board of directors approved a buyback plan last week that is worth $250 million.

After tumbling about 60% over the past 12 months, shares of Phoenix-based Apollo soared 9.80% to $18.71 ahead of Monday’s opening bell.

What do you think?

Click the button below to comment on this article.