Strayer Education Inc.
) posted first-quarter 2013 earnings of $1.59 per share, beating
the Zacks Consensus Estimate of $1.46 by 8.9%. Earnings were also
better than the company's expected range of $1.45 - $1.47 per
share. However, earnings plunged significantly, by 24%, from
$2.09 reported in the year-ago period due to top-line decline.
Total revenue in the quarter dropped 8% from the comparable
prior-year quarter to $137.5 million due to lower enrollments and
revenue per student. Total revenue also missed the Zacks
Consensus Estimate of $140 million.
Quarter in Detail
Strayer University's total enrollment for the 2013 spring term
declined 9% to 46,130 students due to decline in both continuing
student enrollments and new student enrollment. Continuing
student enrollments went down 8% year over year while new student
enrollments declined 14%.
Operating income in the quarter plummeted 27% to $29.9 million.
The operating margin contracted 550 basis points to 21.8% due to
decline in revenues and higher bad debt expenses. Bad debt
expense as a percentage of revenues was 4.0% in the first
quarter, up 20 basis points from the prior-year quarter.
Other Financial Details
Strayer Education ended the quarter with cash and cash
equivalents of $50.8 million as of Mar 31, 2013 compared to $47.5
million as of Dec 2012. During the quarter, the company
repurchased stocks worth $25 million. As of Mar 31, 2013, the
company had $70 million worth of stocks left under its share
Strayer Education expects second-quarter 2013 earnings in the
range of $1.37 - $1.39 per share, based on the enrollment for the
spring term of 2013.
Strayer Education carries a Zacks Rank #4 (Sell). This
post-secondary education company has been witnessing decline in
enrollments over the past few months due to continued
unemployment, overall economic downturn and a subsequent decline
in student demand due to lower confidence in job prospects.
However, education stocks such as
New Oriental Education & Technology Group
TAL Education Group
) are currently performing well and are worth considering. All
the three companies hold a Zacks Rank #2 (Buy).
CHINAEDU CP-ADR (CEDU): Free Stock Analysis
NEW ORIENTAL ED (EDU): Free Stock Analysis
STRAYER EDUC (STRA): Free Stock Analysis
TAL EDUCATN-ADR (XRS): Free Stock Analysis
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