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Strayer Education Tanks |
HenryTo
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Location: Los Angeles, California
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 Posted: Wed May 04, 2005 11:50 am Post subject: Strayer Education Tanks |
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Taking other for-profit secondary educational institutions down with it, such as APOL and COCO. COCO also reported a huge slowdown in enrollment last week. This sector is definitely an "avoid" for now, although I am still bullish on this sector in the long-run.
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Strayer 1st-qtr profit jumps, warns on 2nd qtr
Wed May 4, 2005 10:44 AM ET
WASHINGTON, May 4 (Reuters) - Strayer Education Inc. (STRA.O: Quote, Profile, Research) , a for-profit education company, on Wednesday said first-quarter profit rose 23 percent, helped by increased enrollment, but issued a warning about second-quarter earnings.
Its shares slid 19 percent in mid-morning trade.
The company said it expected second-quarter earnings per share in a range that fell short of analysts' expectations.
The Arlington, Virginia-based company said net income increased to $14.1 million, or 94 cents per share, from $11.5 million, or 76 cents per share, a year earlier. It also forecast second-quarter profit of 82 cents to 84 cents per share.
Analysts polled by Reuters Estimates, on average, forecast profit of 93 cents and 91 cents per share for the first and second quarters, respectively.
Revenues rose 22 percent to $56.2 million from $46.1 million due to increased enrollment and a 5 percent tuition increase, which started in January 2005.
Strayer also said it had opened two new campuses for the 2005 summer term in Greensboro, North Carolina and one in Colombia, South Carolina, taking the total number of Strayer University campuses to 34.
Enrollment at Strayer University for the 2005 spring term rose 15 percent to 23,733 students compared with 20,681 for the same term in 2004, the company said.
But while the rate of growth of continuing students was 18 percent in the 2005 spring term, its rate of growth of new students was nil.
Out-of-area online students increased 42 percent, while students taking 100 percent of their classes online increased 26 percent.
The stock fell $19.41 to $84 on Nasdaq, where it was the top net loser. |
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HenryTo
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Joined: 06 Aug 2004
Posts: 11742
Location: Los Angeles, California
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| Posted: Thu Feb 16, 2012 2:16 pm Post subject: |
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Morningstar on STRA's 4Q results.
| Quote: | | Fourth-quarter results for Strayer Education STRA came in just ahead of management's guidance range, which was lowered late last year, as the firm remained focused on cost control amid the challenging industrywide environment. Although new campuses--a total of 30, in operation for three years or less--have been growing nicely, enrollments at mature campuses and those taking 100% of classes online remain under pressure. Our financial model already assumes continued near-term pressure on overall enrollments and operating margins, consistent with management's guidance, and we are not making a change to our $130 fair value estimate. Total revenue dropped 9% year over year to $155 million, but the 12% drop in winter (December) overall enrollment supports our view that fundamental top-line growth is unlikely to recover in the near term. We continue to watch underlying online student trends, which fell 17% and were somewhat weaker than anticipated. Indicative of the firm's cost structure, which remains relatively fixed on a quarter-by-quarter basis, operating margins fell 600 basis points, to 28%. Tight control of discretionary expenses translated into better-than-expected earnings per share of $2.30, relative to our $2.26 estimate (which was in line with consensus). For 2012, we still believe that a mid- to high-single-digit decline in total student enrollments and a 400-basis-point drop in year-over-year operating margins (to 23.5% at the midpoint) is reasonable. We think the for-profit education sector faces several headwinds (regulatory, cyclical, and structural), but we perceive Strayer as a solid operator with a long-term approach to managing its ente rprise, which we appreciate. There's still not much near-term visibility regarding student inquiries or enrollments, which could keep shares range-bound for the foreseeable future. However, we continue to believe that the current valuation excessively discounts the normalized earnings power of the enterprise: The firm continues to expand its footprint and steadily take share, pay its quarterly dividend (a 3.5% yield at the current share price), generate free cash flow, and can pull the lever and buy back its shares as appropriate. |
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