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American Public (APEI) Q4 Earnings Meet Estimates, Stock Down

Zacks Equity Research
·4 min read

American Public Education, Inc.’s APEI shares declined nearly 8% in the after-hour trading session on Mar 10, after it reported fourth-quarter 2019 results. While revenues topped analysts’ expectation, earnings met the same. However, both the metrics declined year over year due to lower contribution from its segments.

Delving Deeper

During the quarter under review, the company’s adjusted earnings met the Zacks Consensus Estimate of 37 cents per share. However, the reported figure decreased nearly 33% on a year-over-year basis.

Total revenues amounted to $74.4 million, which topped the consensus mark of $73.1 million by 1.8% but declined 3.3% from the year-ago period. Lower contribution from the Hondros College of Nursing (“HCN”) and APEI segments negatively impacted the results.

American Public Education, Inc. Price, Consensus and EPS Surprise

American Public Education, Inc. Price, Consensus and EPS Surprise
American Public Education, Inc. Price, Consensus and EPS Surprise

American Public Education, Inc. price-consensus-eps-surprise-chart | American Public Education, Inc. Quote

Total costs and expenses during the quarter increased 0.4% year over year.

Segment Discussion

APEI’s revenues of $66.5 million fell 0.5% from the year-ago period. Within the APEI segment, American Public University System’s (“APUS”) student enrollment as of Dec 31, 2019 declined 1% from the comparable year-ago period to 81,000. During the quarter, total net course registration inched up 1% from the year-ago quarter to 79,800. Net course registrations by new students also grew 1% from the prior-year quarter to 9,900.

At HCN, revenues decreased 21.7% year over year to $7.9 million owing to reduced enrollments. Total and new student enrollment in HCN also dropped 24% and 20% from the prior-year quarter to 1,600 and 530 students, respectively.

Since Jan 1, 2019, the APEI segment started charging HCN for the value of courses taken by employees at APUS. During the quarter, inter-segment elimination totaled $27 million.

Financials

As of Dec 31, 2019, the company had total cash and cash equivalents of $202.7 million compared with $212.1 million at the end of 2018. Capital expenditure totaled $7.3 million in 2019 compared with $9.4 million in the comparable year-ago period.

Cash flow from operations was $38.4 million in the quarter, up 13.2% from $44.2 million reported in the prior-year period.

During the reported quarter, the company repurchased 450,223 shares of common stock. On Dec 5, 2019, the board approved an additional authorization of $25 million shares. At 2019-end, it had $22 million shares remaining under the repurchase authorization.

First-Quarter 2020 Guidance Bleak

The company expects total revenues between 1% decline and 3% increase from a year ago. It anticipates earnings within 13-18 cents per share, indicating a significant decline from the year-ago reported figure of 32 cents.

Net course registrations at APUS are expected to increase 1% year over year. Registrations by new students are anticipated to be relatively flat with the year-ago quarter.

At HCN, total enrollment is likely to decrease 9% but new student enrollment is projected to increase 31% from the year-ago quarter.

Zacks Rank & Peer Releases

American Public Education, which shares space with Laureate Education Inc. LAUR in the Zacks Schools industry, currently carries a Zacks Rank #1 (Strong Buy). You can the complete list of today’s Zacks #1 Rank stocks here.

Strategic Education, Inc. or SEI STRA reported better-than-expected results in fourth-quarter 2019. The company’s earnings and revenues not only topped analysts’ expectations but also grew from the year-ago level. The uptick was mainly backed by strong top-line numbers, and margins in Strayer and Capella universities.

Adtalem Global Education Inc. ATGE reported second-quarter fiscal 2020 results, with the top and bottom lines beating the Zacks Consensus Estimate. Earnings, however, remained flat year over year. Higher investments in marketing and student recruitment to boost enrollments and revenues have negatively impacted operating income, as well as profits. However, growth of the RN to BSN program helped the company to offset the negatives.

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