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Lincoln Educational Services Corporation’s LINC shares grew 9.8% on May 13, following narrower-than-expected earnings in first-quarter 2020. Its revenues also outpaced the Zacks Consensus Estimate.
Encouragingly, both the metrics improved on a year-over-year basis owing to a 6.6% increase in average student population, which was mainly attributed to student start growth of 13.9% in the first two months of the quarter, partially offset by impacts of the COVID-19 pandemic.
Notably, the company withdrew its full-year 2020 guidance due to uncertainty surrounding COVID-19. Nonetheless, seven of the company’s total campuses will re-open from Jul 1, pursuant to the recent State guidelines.
Lincoln reported net loss of 8 cents per share, narrower than the Zacks Consensus Estimate of a loss of 18 cents. The reported figure was also narrower than the year-ago loss of 22 cents per share.
Lincoln Educational Services Corporation Price, Consensus and EPS Surprise
Lincoln Educational Services Corporation price-consensus-eps-surprise-chart | Lincoln Educational Services Corporation Quote
Total revenues during the quarter totaled $70 million, which topped the consensus mark of $67 million by 5.2% and grew 10.7% from the year-ago period. The upside was driven by a higher beginning population of approximately 760 students.
Total student starts declined 5% year over year. The double-digit starts growth in the initial part of the quarter was more than offset by COVID-19 impacts in March.
Notably, student starts grew 30% year over year in April.
Transportation and Skilled Trades’ revenues of $49.1 million grew 10.7% from the year-ago period. Average student population growth of 3.7% year over year supported the upside. Also, average revenue per student contributed 6.3% to the growth. However, starts declined 5.5% year over year in the quarter. EBITDA during the quarter came in at $6.5 million, up 77.6% from a year ago.
At the Healthcare and Other Professions segment, revenues increased 10.8% year over year to $21 million. Average population increased 12.5% from the prior-year quarter. Starts, however, declined 4% from the prior year. EBITDA in the segment was $2.1 million, almost double from the prior-year period.
Total costs and expenses during the quarter increased 4.8% year over year. Selling, general and administrative expenses — as a percentage of revenues — decreased 155 bps. EBITDA during the quarter was $0.5 million versus negative $2.8 million a year ago.
As of Mar 31, 2020, the company had total cash and cash equivalents of $9.7 million compared with $23.6 million at 2019-end. Total liquidity at the end of quarter was $30.7 million, including approximately $21 million available under the credit facility. Total debt outstanding under the credit facility was $19.3 million, down from $25.2 million as of Mar 31, 2019.
Cash used in operations was $11.9 million in the quarter, up from $10.9 million reported in the prior-year period.
As of Mar 31, 2020, it had 22 campuses, in line with the comparable year-ago period.
Zacks Rank & Peer Releases
Lincoln currently carries a Zacks Rank #2 (Buy). You can the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Strategic Education, Inc. or SEI STRA — currently carrying a Zacks Rank #3 (Hold) — reported stellar results in first-quarter 2020, wherein 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, also holding a Zacks Rank #3, reported impressive earnings in third-quarter fiscal 2020. Its earnings not only topped the Zacks Consensus Estimate but also grew strongly on a year-over-year basis on the back of new student enrollments, employer partnerships and prudent cost management across the business.
American Public Education, Inc. APEI — also a Zacks #3 Ranked stock — reported mixed results in first-quarter 2020, wherein earnings missed the Zacks Consensus Estimate, while revenues beat the same. Notably, both the metrics were within management’s respective guided ranges. The company registered nearly 56% growth in new student enrollment and a 14% increase in total student enrollment for the second quarter.
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