DeVry 4Q profit plunges on weak enrollment
DOWNERS GROVE, Ill. (AP) — DeVry Inc.'s fourth-quarter profit plunged as the for-profit education company struggled with lower enrollment, restructuring expenses and other charges.
The company said Thursday that it earned $8.1 million, or 12 cents per share, for the quarter that ended June 30. That's compared with $75.2 million, or $1.08 per share, in the same quarter of the prior year. After adjusting for charges, restructuring expensing and other items, it earned 47 cents per share versus $1.08 per share in the prior year.
The company is one of many in the industry performing poorly amid a wave of changes.
Enrollment grew at these schools during the recession as people looked to improve their ability to find a job. At the same time, scrutiny increased. A growing number of critics say for-profit schools are graduating students with too much debt and too few job opportunities. Many charge they aren't ensuring that enough students graduate at all.
Companies say the criticism has hurt enrollment but they are also feeling the effect of new federal regulations aimed at helping students find jobs and repay debt. Schools who fail to meet the rules risk losing federal money. Most for-profit education companies have stiffened enrollment guidelines as a result.
DeVry has seen an extended downturn in enrollment. It said that its total enrollment sank more than 3 percent to 109,896 for its summer term.
As a result of the enrollment decline, DeVry told investors last month that it would cut 570 jobs. It also warned that its fourth-quarter results would likely fall short of market expectations.
In the April-June period, DeVry's total revenue fell more than 7 percent to $505.9 million from $546.8 million.
Analysts polled by FactSet were expecting the company to earn 46 cents per share on revenue of $508.4 million.
"While we are disappointed with the results for this quarter and year, we are optimistic about mid- and long- term growth prospects in higher education and for DeVry," CEO Daniel Hamburger said. "We are executing a plan to improve DeVry's near-term performance. The most important elements of the plan are to align our cost structure with our enrollment levels and to regain enrollment growth in our high-quality academic programs."
The company earned $141.6 million, or $2.09 per share, for the year versus $330.4 million, or $4.68 per share, last year. It earned $3.22 per share versus $4.68 per share on an adjusted basis. Revenue fell 4 percent to $2.09 billion.
DeVry, based in Downers Grove, Ill., owns DeVry University, Chamberlain College of Nursing, The Carrington Colleges Group and DeVry Medical International.
DeVry's stock fell 12 cents to $19.75 in after-hours trading on Thursday as many investors had already sold shares following the company's warning of a fourth-quarterly shortfall. DeVry's stock has lost roughly 63 percent of its value in the past year.