) is set to report its fourth-quarter and fiscal 2013 results on
Aug 8. Last quarter, it posted an 8.4% positive surprise. Let's
see how things are shaping up for this announcement.
Factors to Consider This Quarter
After delivering solid results in the first two quarters of
fiscal 2013, DeVry'sthird-quarter results were somewhat
disappointing. The company beat earnings but missed out on
revenues as the improving new enrolment trends seen in the past
two quarters could not be sustained.
DeVry has been witnessing persistent enrollment declines as a
result of the overall economic downturn, continued unemployment
and lack of student confidence. Especially, enrollments have
declined significantly at its flagship DeVry University.
In fact, enrollments have declined across the entire higher
education system in 2012 in the U.S. Large education companies
Apollo Group, Inc.
) have been witnessing declining enrollments since the past many
We do not expect to see any major improvement in enrollment
trends at DeVry University in the fourth quarter. However, we
believe DeVry's healthcare and international institutions,
Chamberlain, Ross, Becker and DeVry Brasil, will continue to show
positive growth. Costs will continue to go down, pushing margins
In fiscal 2013, revenues are expected to decline from the 2012
levels. Total operating costs are expected to decline year over
year in the range of 1%-2% in fiscal 2013, due to significant
cost management at its transition institutions like DeVry
University and Carrington Colleges.
Our proven model does not conclusively show that DeVry is
likely to beat earnings this quarter. That is because a stock
needs to have both a positive Earnings ESP (Read:
Zacks Earnings ESP: A Better Method
) and a Zacks Rank of #1, 2 or 3 for this to happen. That is not
the case here, as you will see below.
The Earnings ESP is 0.0%.
Zacks Rank #3 (Hold):
DeVry's Zacks Rank #3 (Hold) lowers the predictive power of ESP
because the Zacks Rank #3 when combined with a 0.0% ESP makes
surprise prediction difficult. We caution against stocks with
Zacks Rank #4 and 5 (Sell-rated stocks) going into the earnings
announcement, especially when the company is seeing negative
estimate revisions momentum.
Other Stocks to Consider
Here are some other companies in the services sector that you
may want to consider, as our model shows they have the right
combination of elements to post an earnings beat this
Grand Canyon Education, Inc.
), with Earnings ESP of +2.27% and a Zacks Rank #2 (Buy).
Student Transportation, Inc.
), with Earnings ESP of +16.67% and a Zacks Rank #3 (Hold).
APOLLO GROUP (APOL): Free Stock Analysis
DEVRY INC (DV): Free Stock Analysis Report
GRAND CANYON ED (LOPE): Free Stock Analysis
STUDENT TRANSPT (STB): Free Stock Analysis
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