(By Balaseshan) Apollo Group Inc. (NASDAQ: APOL) reported a drop in first quarter adjusted earnings due to lower enrollment. However, results exceeded Street's expectations. The private education provider narrowed its full year revenue forecast.
Adjusted earnings from continuing operations for the first quarter were $137.88 million or $1.22 per share, down from $165.32 million or $1.26 per share last year.
The latest quarter GAAP results included restructuring and other charges of $24.1 million attributable to its optimization efforts and a $16.9 million credit for the reversal of charges associated with a securities class action lawsuit.
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Revenue declined 10% to $1.06 billion, due to a 11.6% drop in degree seeking revenue, partially offset by higher non-degree seeking revenue, and other revenue.
Analysts, on average, polled by Thomson Reuters had expected a profit of $0.90 per share on revenue of $1.03 billion for the first quarter.
For the quarter, University of Phoenix Degreed Enrollment fell 14.3% to 319,700, while New Degreed Enrollment dropped 15.1% to 54,100.
Operating expenses fell 9.4% to $824.2 million, while adjusted operating expenses declined 8% to $817.0 million. This decrease was primarily attributable to a reduction in costs from restructuring activities, which contributed to the decline in admissions advisory headcount, rent expense and depreciation expense. Additionally, a portion of the decrease was related to variable expenses due to lower net revenue.
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The provision for uncollectible accounts receivable (bad debt) also declined 19.7% to $33.4 million, primarily due to lower enrollment, as well as improved collection rates for aged receivables, at University of Phoenix.