Higher tuition, more students boost Strayer profit

Higher tuition, growing enrollment boost Strayer Education profit; dividend rises 50 percent

• On 12:50 pm EDT, Thursday October 29, 2009

ARLINGTON, Va. (AP) -- For-profit education provider Strayer Education Inc. said its profit grew as more students enrolled in its schools, while the price it charged for tuition rose.

The Arlington, Va., company said net income rose 42 percent to $16.7 million, or $1.21 per share, for the three months ended Sept. 30, compared with $11.8 million, or 83 cents per share, in the same period last year.

Sales increased 31 percent to $114.4 million from $87 million as fall term student enrollments grew 22 percent to 54,317 students from a year ago and tuition prices rose 5 percent.

That's not as fast as the 24 percent growth in enrollments last year, though.

Analysts polled by Thomson Reuters had expected profit of $1.15 per share.

Most for-profit education companies' enrollments have surged as unemployment rises.

Meanwhile, bad-debt expenses, the loans and tuition the company writes off as uncollectable, increased to 4.5 percent of revenue from 3.7 percent of sales last year.

The company said it expects to open 13 campuses next year and that it will hike tuition another 5 percent in January 2010. Enrollment should grow 20 percent in 2010, the company said, meaning sales would rise 24 or 25 percent.

Strayer expects earnings per share between $8.30 and $9.50 for 2010, in line with analysts' expectations.

The school also said it was raising its annual dividend 50 percent, to $3 from $2. It will pay a 75 cent quarterly dividend on Dec. 10 to shareholders of record on Nov. 24.

Strayer shares dipped 67 cents to $211.17 in afternoon trading.

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