Post Earnings Coverage as Apollo Education Reported Q1 Results

Upcoming AWS Coverage on Grand Canyon Education

LONDON, UK / ACCESSWIRE / January 12, 2017 / Active Wall St. announces its post-earnings coverage on Apollo Education Group, Inc. (NASDAQ: APOL). The Company reported its financial results for the first quarter fiscal 2017 (Q1 FY17) on January 09, 2017. The Phoenix, Arizona-based Company's revenue declined 17.3% y-o-y. Apollo Education, however, saw positive net earnings during the quarter. Register with us now for your free membership at:
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One of Apollo Education Group's competitors within the Education & Training Services space, Grand Canyon Education, Inc. (NASDAQ: LOPE), is estimated to report earnings on February 15, 2017. AWS will be initiating a research report on Grand Canyon Education following the release of the Company's next earnings results.

Today, AWS is promoting its earnings coverage on APOL; touching on LOPE. Get our free coverage by signing up to:

http://www.activewallst.com/registration-3/?symbol=APOL

http://www.activewallst.com/registration-3/?symbol=LOPE

Earnings Reviewed

Apollo Education's revenue fell during Q1 FY17 to $484.50 million from $586.02 million recorded at the end of Q1 FY16. Revenue numbers for Q1 FY17 also lagged behind market consensus estimates of $494.6 million. The decrease in quarterly revenues was primarily attributed to a 23.4% net revenue decline at the University of Phoenix principally due to lower enrollment, and partially offset by an increase in Apollo Global's net revenue.

During the reported quarter, the for-profit education Company's net income attributed to Apollo Education came in at $4.07 million, or $0.04 per diluted share, compared to net loss attributed to Apollo Education of $60.77 million, or $0.56 loss per diluted share, in prior year's comparable quarter. Excluding special items, the Company's Q1 FY17 income from continuing operations attributed to Apollo Education came in at $15.34 million, or $0.14 per diluted share, compared to $33.14 million, or $0.31 per diluted share, in the year ago corresponding quarter. Wall Street had expected the Company to post adjusted diluted earnings (excluding special items) of $0.19 per share for the reported quarter.

Operational Metrics

In Q1 FY17, Apollo Education's total costs and expenses fell to $476.10 million in Q1 FY17 from $631.27 million in Q1 FY16. The Company reported operating income of $8.40 million in Q1 FY17 compared to operating loss of $45.25 million in Q1 FY16. Additionally, adjusted EBITDA for the quarter came in at $52.29 million versus $83.10 million in Q1 FY16.

Segment Performance

During Q1 FY17, University of Phoenix's revenues declined 23.4% to $354.29 million from $462.62 million in the prior year's comparable quarter. The degreed enrollment fell 23.2% y-o-y to 135,900, while new degreed enrollment was down by 17.6% y-o-y to 20,200. Furthermore, average degreed enrollment decreased 24.3% y-o-y to 139,200. However, the segment reported operating income of $32.55 million in Q1 FY17 compared to operating loss of $17.50 million in Q1 FY16.

Apollo Global's revenue improved 5.1% to $121.25 million in Q1 FY17 from $115.33 million in the prior year's same quarter. The growth in quarterly revenues was primarily due to the acquisition of Career Partner, acquired in Q2 FY16, but was partially offset by $11 million of foreign exchange translation loss. The segment posted an operating loss of $3.64 million in Q1 FY17 compared to an operating loss of $2.34 million in the prior year's comparable quarter.

Cash Matters and Balance Sheet

Apollo Education generated $16.45 million as cash from operating activities in the reported period compared to net cash used in operating activities of $18.87 million in Q1 FY16. The Company ended the quarter with cash and cash equivalents balance of $517.27 million versus $464.02 million as on August 31, 2016. Furthermore, the Company had long-term debt amounting to $33.25 million as on November 30, 2016, compared to $35.19 million as on August 31, 2016.

Merger

On February 07, 2016, Apollo Education entered into merger agreement with AP VIII Queso Holdings, L.P., a subsidiary of funds affiliated with Apollo Management VIII, L.P., which is an affiliate of Apollo Global Management, LLC and Socrates Merger Sub Inc., a subsidiary of Queso. As per terms of the agreement, Class A and Class B common stockholder of Apollo Education will have the right to receive $10.00 per share in cash. The deal was approved by Class A and Class B common stockholders on May 06, 2016 and is waiting for various regulatory and customary approvals.

Stock Performance

On January 11, 2017, Apollo Education Group's share price finished the trading session at $9.94, slightly sliding 0.20%. A total volume of 452.75 thousand shares exchanged hands. The stock has surged 22.41% and 34.51% in the last three months and past twelve months, respectively. Furthermore, in the previous month, shares of the Company have gained 3.65%. The stock currently has a market cap of $1.09 billion.

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SOURCE: Active Wall Street