Apollo Education's third quarter 2014 adjusted earnings of $0.76
per share beat the Zacks Consensus Estimate by 16.9%. We believe
cost reduction and improved efficiency helped Apollo beat Estimate.
However, earnings declined 27.6% year over year due to weak
revenues. Revenues have remained weak for several quarters due to
declining enrollment trends. Though net revenue of $799.9 million,
declined year over year, it comfortably surpassed the Zacks
Consensus Estimate by 0.7%. In addition, the company has raised its
guidance for 2014 revenue on the back of better than expected
results in the third quarter 2014. Apollo's accelerated efforts to
right-size its business through significant layoffs and campus
closings will give it a competitive advantage in the long term.
Though we believe these turnaround efforts should eventually
improve enrollment trends and boost margins, we await better
visibility before having a more bullish outlook on the stock.
Based in Phoenix, AZ, Apollo Education Group, Inc. (APOL) is a
leading private education service provider in the U.S. and has been
in the education business for 40 years. Apollo Group offers
innovative and distinctive educational programs and services for
undergraduate, masters and doctoral levels, both online and
on-campus. These programs are offered through the company's
Apollo Group reports its operating results under the following
University of Phoenix It is the flagship segment (represents
about 90% of revenues) and offers bachelor's, masters and doctoral
programs through its campuses and learning centers spread across
the U.S. including the Commonwealth of Puerto Rico. However, the
majority of University of Phoenix students study exclusively
online. The University has been accredited by The Higher Learning
Commission (HLC) of the North Central Association of Colleges and
Schools and also holds other programmatic accreditations. UOP
accounted for 90% of the company's total revenue in fiscal
Apollo Global - Apollo Global aims to make investments in
international education market. Apollo Global, Inc. includes
revenues from the largest Apollo global subsidiary, BPP Holdings
plc, a U.K.-based company which provides education and training to
legal and finance professionals. BPP Holdings was acquired by
Apollo Global in Jul 2009. This segment also includes revenues from
other subsidiaries of Apollo Global in Chile (UNIACC) and Mexico
(ULA). Apollo Global also includes, Indian Education Services
Private Ltd., a joint venture with Indian media company, HT Media
Limited, to offer educational services and programs in India. The
newest addition to Apollo Global segment is Open Colleges Australia
which was acquired in Dec 2013.
Other The Other segment includes revenues from Western
International University (WIU also accredited by HLC in the U.S.),
Institute of Professional Development (IPD) and The College for
Financial Planning Institutes Corporation, Inc (CFFP) (also
accredited by HLC). The segment also includes Carnegie Learning (a
publisher of research-based math curricula and adaptive learning
software acquired in Sep 2011) and Apollo Lightspeed (innovation
During the first quarter of fiscal year 2014, Apollo Group
changed its name from Apollo Group, Inc. to Apollo Education Group,
Apollo Education Group, Inc. (APOL): Read the Full
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