NEW YORK (AP) -- Better-than-expected fiscal second-quarter results from Apollo Group Inc. failed to lift shares of most for-profit education companies Monday.
Apollo, which operates the University of Phoenix, said its fiscal second-quarter net income tumbled 79 percent, hurt by a drop in enrollment. But the results beat Wall Street predictions and Apollo shares jumped 8 percent in morning trading.
Apollo attributed the drop in profit to lower enrollment and higher marketing costs, which were partially offset by lower restructuring and bad-debt costs. Enrollment at the University of Phoenix fell more than 15 percent to 300,800, while new degreed enrollment dropped 20 percent to 38,900.
Apollo projected fiscal 2013 revenue of $3.65 billion to $3.75 billion, while analysts expect $3.73 billion.
Citi analyst James Samford backed his "Neutral" rating for the stock, noting that enrollment trends were worse than expected, with total enrollment down 16 percent and new starts down 20 percent from last year.
Samford said that while Apollo shares might get a bit of a boost, he remains concerned about continued weak enrollment, along with accreditation-related problems.
The for-profit education industry enjoyed a big boom when the recession first hit, but student demand has faded. In addition, increased criticism of the schools, new federal regulations and the still-struggling economy have weighed on enrollments.
Here's how some for-profit education companies were trading Monday:
— Apollo, up $1.41, or 8 percent, to $18.45 after peaking at $19.63 earlier in the day.
— DeVry Inc., down 11 cents to $32.44.
— Bridgepoint Education Inc., up 20 cents, or 2 percent, to $10.46.
— ITT Educational Services Inc., up 14 cents to $13.33.
— Strayer Education Inc., down 30 cents to $50.17.
— Corinthian Colleges Inc., up 3 cents to $2.12.
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