Apollo Education Group Shares Tumble On Weak Revenue Forecast

Shares of

tumbled over 17% in pre-market trading after the company reported a narrower-than-expected loss for the fiscal second quarter, but issued a downbeat sales forecast. The Phoenix, Arizona-based company posted a quarterly net loss $33.6 million, or $0.31 per share, versus a year-ago profit of $14.6 million, or $0.13 per share. Excluding non-recurring items, the company posted an adjusted loss of $0.10 per share. Its revenue declined to $578.6 million from $672.8 million. However, analysts were expecting a loss of $0.16 per share on revenue of $584.61 million. Operating loss for the quarter was $54.5 million, versus operating income of $10.3 million in the year-ago quarter. Second quarter University of Phoenix new degreed enrollment shrank 13% to 28,300, while degreed enrollment declined 15% to 213,800. As of February 28, 2015, Apollo Education had $759.8 million in unrestricted cash and cash equivalents and short-term marketable securities, versus $1.4 billion as of August 31, 2014. "While we faced challenges in the second quarter, we believe Apollo Education Group has the right long-term strategy in place," said Greg Cappelli, Chief Executive Officer, Apollo Education Group. "In a time of unprecedented change in the higher education industry, we are focused on enhancing outcomes through a deep understanding of student and employer needs. This includes differentiating University of Phoenix through its program-based colleges and diversifying our organization with the expansion of Apollo Global and other targeted growth initiatives." Apollo Education projects Q3 revenue of $690 million to $705 million, versus analysts' estimates of $741 million. The company also lowered its full-year revenue forecast to $2.63 billion to $2.68 billion, versus its earlier outlook of $2.74 billion to $2.8 billion. Apollo Education shares slipped 17.86% to $22.99 in pre-market trading.