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Universal Technical's (UTI) Q2 Loss Wider Than Expected

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Universal Technical Institute, Inc. UTI reported adjusted loss of 40 cents per share in the second quarter of fiscal 2018, wider than the Zacks Consensus Estimate of a loss of 19 cents. The loss figure was also wider than the year-ago quarter’s loss of 12 cents.

Revenues & Enrollment

Revenues of $80.7 million in the second quarter fell 2.2% from $82.5 million in the prior-year quarter. The decline was caused by a 4.4% drop in average student enrollment.

Total starts fell 2.7% year over year during the quarter.

Operating Highlights

The company reported operating loss of $8.8 million against an operating income of $0.7 million in the prior-year quarter.

Operating expenses rose 9.4% to $89.5 million. The increase was primarily a result of planned increases in compensation costs.

Earnings (loss) before interest, taxes, depreciation and amortization (EBITDA) were $4 million compared with $5.6 million in the prior-year quarter.

Universal Technical Institute Inc Price, Consensus and EPS Surprise


Universal Technical Institute Inc Price, Consensus and EPS Surprise | Universal Technical Institute Inc Quote


The company had cash and cash equivalents of $82.2 million as of Mar 31, 2018, compared with $50.1 million as of Sep 30, 2017.

Fiscal 2018 Guidance Reaffirmed

Universal Technical expects new student starts growth in low-single digits. The average student population is likely to decline mid-single digits.

Revenues are expected in the range of  $310-$320 million for the year.

Operating expenses are projected in the range of $348-$353 million.

Universal Technical expects to incur operating loss between $28 million and $33 million as well as projects a negative EBITDA.

Capital expenditures are expected between $24 million and $25 million for the year ending Sep 30, 2018. This includes approximately $11 million from New Jersey campus that is expected to open in the fall of 2018 along with approximately $4 million to expand welding program to two additional campuses, $7 million for new and replacement equipment for existing campuses; and approximately $2.5 million for real estate consolidation.

Zacks Rank & Peer Releases

Universal Technical carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Capella Education CPLA reported adjusted earnings of $1.20 per share in the first quarter of 2018, which surpassed the Zacks Consensus Estimate of $1.16 by 3.5%. In the year-ago quarter, earnings were 94 cents. Capella’s quarterly revenues of $112 million missed the Zacks Consensus Estimate of $113 million and inched up 0.2% year over year.

Strayer Education Inc. STRA reported first-quarter 2018 adjusted earnings of $1.23 per share, beating the Zacks Consensus Estimate of $1.11 by 10.8%. However, earnings improved 29.5% year over year. Revenues improved 1.4% from the prior-year quarter to $116.5 million, owing to higher winter term enrollment.

Upcoming Peer Release

American Public Education, Inc. APEI is scheduled to release quarterly earnings on May 8, after the market closes.

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