HERNDON, Va. (AP) -- Strayer Education Inc.'s shares plunged Friday after it reported that profit fell sharply on lower enrollment during its fiscal third quarter. The for-profit education company also said it is suspending its dividend payments in 2013.
Its shares fell more than 17 percent by mid-afternoon, to their lowest level in more than a decade.
Strayer, like other for-profit schools, has struggled over the past few years as enrollments decline across the industry. It reported that total enrollment for its fall term fell 5 percent to 51,727, as more new student enrolled but existing students dropped off its rolls.
The Herndon, Va.-based company, which runs Strayer University, earned $4.1 million, or 36 cents per share, for the period that ended Sept. 30. That's down sharply from $13.9 million, or $1.20 per share, in the third quarter of last year. Revenue fell 9 percent to $124.3 million.
Analysts polled by FactSet predicted profit of 33 cents per share on revenue of $123.6 million.
Strayer said that it will suspend its $1 quarterly dividend in 2013. It also said its board has raised its authorization for share repurchases to $120 million. It had had $80 million left under its old program.
Enrollment at for-profit schools and universities soared during the recession as job-seekers tried to beef up their skills, but have dropped in recent years. That is due in part to new regulations that forced many schools to tighten enrollment standards or risk losing access to federal financial aid that makes up much of for-profit education company's revenue. These companies have also struggled with increasing criticism of their programs and an extended tough economy that have hampered student's willingness or ability to enroll.
Strayer said it will increase tuition at Strayer University by 3 percent, but because of how its students pay for classes and the scholarships the school gives, its revenue per student will likely be unchanged.
The company said it expects to earn $1.43 to $1.45 per share for the fourth quarter, while analysts expect $1.54 per share.
If revenue in 2012 remains steady in 2013, the company predicts earnings per share of $5.40 to $5.60 next year. Analysts were predicting $5.45 per share.
Shares fell $9.72 to $46.45 in afternoon trading. Its stock last closed at levels this low in 2001.
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