Hurt by fewer students and impairment charges, Corinthian Colleges (NASDAQ:COCO) swung to a second-quarter loss over a year ago profit, however the educator's results were stronger-than-expected, sending its shares higher Tuesday.
The Santa Ana, Calif-based company posted a net loss of $163.7 million, or $1.94 a share, compared with a profit of $39.4 million, or 44 cents, in the same quarter last year.
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Excluding one-time costs, particularly related to $206 million impairment, facility and severance charges, the company earned 23 cents a share, marginally ahead of average analyst estimates polled by Thomson Reuters of 22 cents.
Revenue for the for-profit post-secondary educator was $482.2 million, up 16.5% from $414.3 million a year ago, beating the Street’s view of $476.28 million.
"As expected, the rate of new student enrollment growth declined in the second quarter," Jack Massimino, the company’s chief executive said in a statement, attributing the decrease to a halt in enrollment of ability-to-benefit students.
“Negative industry publicity and uncertainties in the regulatory environment also played a role in the decline, as did a systems conversion in the Online Learning Division, which temporarily slowed that unit's growth,” he said.
Earnings were also hurt by higher education services expenses, which were 60% of revenue, due primarily to increased compensation and bad debt, as well as new campus facility costs.
The company booked an increase in bad debt expense, driven by a delay in the timing of financial aid packaging, as well as higher advertising expenses.
Looking ahead, the company sees third-quarter earnings in the range of 20 cents to 22 cents a share on revenue of $462 million to $472 million.