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Lincoln (LINC) to Report Q3 Earnings: What's in the Cards?

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Zacks Equity Research
·4 min read
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Lincoln Educational Services Corporation LINC is scheduled to report third-quarter 2020 results on Nov 11, before the opening bell.

In the last reported quarter, the company’s earnings topped the Zacks Consensus Estimate by 114.3% but revenues missed the same by 3.8%. This post-secondary education service provider posted earnings of 2 cents per share in the second quarter against a loss of 12 cents a year ago. Revenues of $62.5 million were down 1.7% year over year.

Markedly, Lincoln — which shares space with American Public Education APEI in the Zacks Schools industry — reported better-than-expected earnings in two of the last four quarters, with the average surprise being 27.5%.

Lincoln Educational Services Corporation Price and EPS Surprise

Lincoln Educational Services Corporation Price and EPS Surprise
Lincoln Educational Services Corporation Price and EPS Surprise

Lincoln Educational Services Corporation price-eps-surprise | Lincoln Educational Services Corporation Quote

Trend in Estimate Revision

The Zacks Consensus Estimate for the to-be-reported quarter’s earnings has been unchanged over the past 30 days at 2 cents per share. This indicates a 60% decrease from the year-ago earnings of 5 cents per share. The consensus mark for revenues is $73.4 million, suggesting a 1% year-over-year improvement.

Factors to Consider

Lincoln recently announced third-quarter enrollment metrics, pointing to strong overall enrollment growth of 15% year over year, indicating no change from the second-quarter figure. Starts for the company’s Transportation and Skilled Trades segment increased 17% for the period, and that of Lincoln’s Healthcare and other Professions segment grew 11%.

Lincoln also pointed out that the management team continued to execute the strategies designed to provide to an increasing number of students the new skills that employers require for in-demand essential careers during the third quarter. Notably, it implemented on-site instruction at all 22 of its campuses during the quarter and incorporated efficient distance learning components introduced earlier in the year.

The company’s strategies to boost enrollment in a tough economic environment, and further utilize cost cuts and capacity rationalization will likely reflect in third-quarter results. However, challenges presented by the COVID-19 pandemic like restricted access to externships sites and classroom labs, as well as reduction of non-tuition revenues may have been pressing concerns.

What Our Quantitative Model Predicts

Our proven model does not conclusively predict an earnings beat for Lincoln this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here.

Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, is 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Primoris currently carries a Zacks Rank #4 (Sell).

You can see the complete list of today’s Zacks #1 Rank stocks here.

Peer Releases

Strategic Education, Inc. or SEI STRA reported third-quarter 2020 results, wherein the company’s earnings met analysts’ expectations but revenues missed the same. On a year-over-year basis, both the metrics declined, thanks to lower enrollment, revenue-per-student and margin at Capella University.

Adtalem Global Education Inc. ATGE reported solid results for first-quarter fiscal 2021, wherein earnings and revenues surpassed the Zacks Consensus Estimate, as well as improved year over year.

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Strategic Education Inc. (STRA) : Free Stock Analysis Report
 
American Public Education, Inc. (APEI) : Free Stock Analysis Report
 
Lincoln Educational Services Corporation (LINC) : Free Stock Analysis Report
 
Adtalem Global Education Inc. (ATGE) : Free Stock Analysis Report
 
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