American Public Education Inc.
), an online provider of higher education to military and public
service communities, recorded earnings of 71 cents per share,
beating the Zacks Consensus Estimate by 11 cents. Earnings were
also above the prior-year figure of 52 cents, and the guidance of
58 cents to 60 cents, due to robust top-line growth.
Total revenue of $75.7 million surged 34% from the prior-year
quarter, and also came in ahead of the Zacks Consensus Estimate of
$73 million. The top-line growth also beat management's guidance of
29% growth on the heels of robust student enrollments.
Total net course registration soared 36% to approximately
95,400, and net course registrations from new students grew 53% to
approximately 24,600. American Public stated that about 110,000
students were enrolled in the American Public University System as
of December 31, 2011, reflecting an increase of 31%. Operating
income for the quarter rose 25% to $19.8 million.
For the full year 2011, American Public Education earned
(excluding special items) $2.23 per share, 13 cents above the Zacks
Consensus Estimate and a whooping 64 cents above the 2010 earnings
of $1.59 per share. In 2011, revenues climbed 31% to $260.4
million, slightly above the Zacks Consensus Estimate of $260
American Public Education is an education partner of
Wal-Mart Stores Inc.
). Walmart has allowed family members of eligible Walmart
associates to access its Lifelong Learning Program. This may boost
enrollments for American Public Education in the long term.
First-Quarter 2012 Outlook
American Public Education introduced its financial guidance for
the first quarter of 2012. The company is expecting a revenue
growth of approximately 27% for the said quarter. Management now
expects first quarter 2012 net course registrations to rise between
approximately 20% and 22% over the prior-year period. Net course
registrations from new students are expected to rise approximately
14% year over year.
Management further projects first quarter 2012 earnings between
45 cents and 49 cents a share. The Zacks Consensus Estimate is 48
cents per share.
Though the fourth quarter results are impressive, we believe the
overall outlook for the first quarter of 2012 is weak. We believe
the overtly cautious outlook may be due to the recent regulation
proposed by the Department of Education that may weigh upon
students' enrollments and the company's profits.
The Department of Education cited that an educational program
could qualify for Title IV funds only if it helps in achieving
gainful employment, which includes the criteria of loan repayment
rate and debt-to-income ratios. The company derives a major portion
of its revenues from federal student financial aid programs, the
Title IV programs. The educational institutions are also under the
scanner due to the rise in the default rate of student loans.
We currently have a Neutral recommendation on American Public
Education. The stock carries a Zacks #3 Rank (short-term 'Hold'
American Public Education's focus on serving military and public
service personnel, high student referral rates and accreditation
enable it to consistently deliver impressive top and bottom lines.
The company's sustained effort to expand educational programs helps
The company is now primarily focusing on increasing net
registrations from civilian students, to safeguard itself from the
adverse impact of a fall in military registrations due to increased
military operations. Further, American Public's debt-free balance
sheet and healthy cash reserves augur well for future operating
AMER PUB EDUCAT (
): Free Stock Analysis Report
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