Strategic Education, Inc. STRA or SEI announced that Strayer Education, Inc. and Capella Education Company have completed the proposed merger deal to create SEI, a national leader in education innovation.
SEI will operate both Strayer University and Capella University as independent and separately accredited institutions. The combined entity comprises Capella’s expertise in online advanced degree programs as well as Strayer’s 125-year heritage, enabling each university to enhance innovations that will improve affordability, and academic and career outcomes for students.
SEI announced second-quarter results for both Strayer Education, Inc. and Capella Education Company.
Strayer Education Q2 Highlights
Strayer Education came up with adjusted quarterly earnings of 87 cents per share, in line with the Zacks Consensus Estimate. Adjusted earnings grew 33.8% from 65 cents per share in the year-ago period.
Revenues improved 1.7% from the prior-year quarter to $114.7 million, owing to higher spring term enrollment. The upside was partly offset by lower revenue per student, given continuing effect of scholarships issued in the fall 2017 term. Additionally, growth in corporate sponsored students, who pay lower tuition, also added to the negatives.
Strayer's total enrollment grew 8% year over year, marking the highest growth rate for the University since 2010. Meanwhile, Strayer University's new student enrollment increased 7%, representing the university's 8th consecutive quarter of new student growth.
Capella Education Q2 Highlights
Capella Education’s adjusted earnings of $1.05 per share in the quarter surpassed the Zacks Consensus Estimate of $1.04. In the year-ago quarter, earnings were 90 cents.
Revenues came in at $111.6 million, beating the consensus mark of $110 million. The reported figure also advanced 1.8% year over year, courtesy of higher enrollment.
Capella reported a 15% year-over-year increase in new student enrollment, which marks the strongest performance in more than three years and second strongest in excess of 10 years. FlexPath has been performing significantly well and now comprises 23% of Capella's Bachelor's and Master's degreed enrollment.
The adjusted operating margin was 15.1% compared with 14.1% in the same period in 2017.
Capella reports under two segments — Post-Secondary and Job-Ready Skills. The Post-Secondary segment comprises Capella University and Sophia Learning. The Job-Ready Skills segment covers Capella Learning Solutions, Hackbright Academy and DevMountain.
Post-Secondary: The segment reported revenues of $108.5 million, up 1.5% from the year-ago quarter due to higher enrollment. However, operating margin of 16.6% in the quarter was flat year over year.
Capella University’s total active enrollment increased 0.5% to 37,786 learners, while new enrollment increased 14.7% on a year-over-year basis.
Job-Ready Skills: The segment reported revenues of $3 million in the second quarter, up 15.4% year over year. That said, the segment reported an operating loss of $2.1 million compared with $2.4 million in the prior-year quarter.
Total enrollments at Strayer University are anticipated to grow 9% to approximately 45,400 students in the third quarter from 41,679 students a year ago. New student enrollments are anticipated to grow approximately 12% and continuing student enrollments are expected to increase nearly 8%.
American Public Education, Inc. APEI is scheduled to report second-quarter results on Aug 8.
Universal Technical Institute, Inc. UTI will report third-quarter fiscal 2018 results on Aug 7.
Adtalem Global Education Inc. ATGE will report quarterly results on Aug 16.
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