Apollo is building out 25 new resource centers based on the successful prototype introduced in Plano, Texas last year. The Insight high school chain is ramping quickly as it gains more state approvals. Insight should be operating in 10 states by the fall, up from four now. Finally, management is also testing various other retention initiatives that are impacting SG&A.

Student financial aid is still a looming issue for Apollo, although the data presented on the call seemed pretty benign. Bad debt expense increased a bit, to 3.85% of revenue from 3.5% last year, due to more associate degree students. Initiatives in collections and retention should help here. Management pointed out that private lenders still only constitute 4% of total financial aid offered to students; 96% of aid is via Title IV federal lending. The company added Bank of America (BAC - commentary - Cramer's Take) as a fifth preferred lender as of the end of February. If a financial aid crisis is brewing that could impact enrollments, the evidence for it is not here yet.

Net-net, there were few shocking revelations in the call commentary. Perhaps that makes the miss all the more shocking, as it is difficult to tie it to some new long-term development. Despite the stock already giving up 20% year to date, the selloff is justified by the level of "un-anticipation" of the miss -- no analysts were out detecting looming issues. Management was pretty far along in re-establishing its credibility after a huge upside last quarter. That credibility is now gone, of course, so the rebuilding process must begin anew.

APOL Preview: How's Bachelor Life?