Markets

Universal Technical (UTI) Reports Wider-Than-Expected Q3 Loss

Universal Technical Institute, Inc.UTI recently reported fiscal third-quarter 2018 results.

Adjusted loss of 52 cents per share in the fiscal third quarter was wider than the Zacks Consensus Estimate of 48 cents and the year-ago quarter's 21 cents.

Quarterly revenues of $74.9 million beat the consensus mark of $74 million by 1.2%. However, revenues declined 1.8% from the prior-year quarter due to a 5.1% drop in average student enrollment.

Total starts dropped 12.7% year over year to 1,548 during the quarter.

Universal Technical Institute Inc Price, Consensus and EPS Surprise

Universal Technical Institute Inc Price, Consensus and EPS Surprise | Universal Technical Institute Inc Quote

Operating Highlights

Operating expenses rose 9.7% to $86.7 million, driven by an increase in contract services, advertising, goodwill and intangible asset impairment expense, compensation and occupancy costs.

Operating loss in the quarter was $11.8 million compared with $2.8 million in the prior-year quarter.

Earnings (loss) before interest, taxes, depreciation and amortization (EBITDA) were $(7.2) million compared with $2.1 million a year ago.

Financials

The company had cash and cash equivalents of nearly $60 million as of Jun 30, 2018 compared with $50.1 million on Sep 30, 2017.

Net cash used in operations came in at $22.4 million in the first nine months of 2018 compared with $29.8 million recorded in the comparable period last year.

Fiscal 2018 Outlook

UTI expects new student starts growth in mid-single digits year over year. The average student population is likely to decline in mid-single digits.

Revenues are expected in the range of $315-$320 million for the fiscal.

Operating expenses are projected in the range of $352-$354 million.

UTI expects to incur operating loss between $32 million and $36 million, as well as projects a negative EBITDA.

Capital expenditures are expected between $23 million and $24 million for the fiscal.

Share Price Performance

UTI has outperformed its industry so far this year. The stock has gained around 28.8% against its industry's collective decline of 0.4% in the said period.

Zacks Rank & Key Picks

Universal Technical currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the same space are Bridgepoint Education, Inc. BPI , Strategic Education, Inc. STRA and RYB Education, Inc. RYB . While Bridgepoint and Strategic Education sport a Zacks Rank #1 (Strong Buy), RYB Education carries a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank stocks here .

Bridgepoint Education and Strategic Education's earnings for 2018 are expected to grow 8.5% and 52.4%, respectively. RYB Education's earnings for 2019 are anticipated to grow 141.2%.

More Stock News: This Is Bigger than the iPhone!

It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.

Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.

Click here for the 6 trades >>

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

Strategic Education Inc. (STRA): Free Stock Analysis Report

Universal Technical Institute Inc (UTI): Free Stock Analysis Report

Bridgepoint Education, Inc. (BPI): Free Stock Analysis Report

RYB Education, Inc. Sponsored ADR (RYB): Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

In This Story

UTI STRA RYB

Other Topics

Stocks

Latest Markets Videos

    Zacks

    Zacks is the leading investment research firm focusing on stock research, analysis and recommendations. In 1978, our founder discovered the power of earnings estimate revisions to enable profitable investment decisions. Today, that discovery is still the heart of the Zacks Rank. A wealth of resources for individual investors is available at www.zacks.com.

    Learn More