For-profit education company Apollo Group (NASDAQ: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.
Shares of the education company surged 10% on the earnings beat and in-line guidance for the full year.
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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%.
Enrollment at the University of Phoenix dropped 15.5% year-over-year to 300,800, while new degreed enrollment slumped 20.1%.
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.