Apollo Education beat the Zacks Consensus Estimate for both
earnings and revenues in the third quarter of fiscal 2014. However,
earnings of $0.61 per share declined 27.6% year over year as a
relatively better top-line performance was offset by weaker
margins. Revenues declined 15.5% due to enrollment shortfall.
Apollo Education's enrollment trends have remained weak for several
quarters now due to lower demand and competitive pressures.
Encouragingly, however, starts improved sequentially in all the
three quarters of 2014. Moreover, Apollo's accelerated efforts to
right-size its business through significant layoffs and campus
closings gives competitive advantage. Also, growth enhancing
investments, innovation and recent price cuts should improve
student value proposition and retention rates. Though we believe
these turnaround efforts should eventually improve enrollment
trends and boost margins, enrollments are unlikely to return to
positive growth in the near future.
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 (UOP) 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 2013.
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 additions to Apollo Global segment are Open Colleges in
Australia, acquired in Dec 2013 and Milpark Education in South
Africa, acquired in May 2014.
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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