Strayer Education, Inc.
) second-quarter 2013 earnings of $1.42 per share beat the Zacks
Consensus Estimate of $1.38 by 2.9%. Earnings were also better
than the company expected range of $1.37 - $1.39 per share.
However, earnings declined by 23%, from $1.85 reported in the
year-ago period due to top-line decline.
Total revenue in the quarter dropped 10% from the comparable
prior-year quarter to $132.0 million due to lower enrollments.
However, total revenue beat the Zacks Consensus Estimate of $131
million by 0.8%.
Quarter in Detail
Strayer University's total enrollment for the 2013 summer term
declined 13% to 38,627 students due to decline in both continuing
student enrollments and new student enrollment. Continuing
student enrollments went down 12% year over year while new
student enrollments declined 17%. However, the company witnessed
strong business in Jack Welch Management Institute, with the
highest continuation rate in the University.
Operating income in the quarter decreased 27.0% to $26.3 million.
Despite lower costs in the quarter, operating margin contracted
480 basis points to 19.9% due to decline in revenues. Bad debt
expense as a percentage of revenues was 4.3% in the second
quarter, down 10 basis points from the prior-year quarter.
Other Financial Details
Strayer Education ended the quarter with cash and cash
equivalents of $67.5 million as of Jun 30, 2013 compared with
$50.8 million as of Mar 31, 2013. During the quarter, the company
did not repurchase any stocks. As of Jun 30, 2013, the company
had $70 million worth of stocks left under its share repurchase
During the quarter, Strayer's business, management and accounting
programs were accredited by the Accreditation Council for
Business Schools and Programs (ACBSP). Its master of education
program is accredited by the Teacher Education Accreditation
Strayer Education expects solid business in third-quarter 2013
based on the total enrollment for the summer term of 2013.
Revenue per student is expected to be flat for full year 2013.
Strayer Education carries a Zacks Rank #2 (Hold).
Some other education companies that are performing well are
Capella Education Company
TAL Education Group
). Both ATA and Capella carry a Zacks Rank #1 (Strong Buy), while
TAL Education Group carries a Zacks Rank #2.
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