This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Apollo's Enrollment Expectation Hurts Industry

The Associated Press

The for-profit education sector took a hit in Tuesday trading after Apollo Group Inc. lowered its enrollment and operating profit expectations for the second quarter, raising concern that the industry's recovery may be slower than anticipated.

Apollo, the parent company of University of Phoenix, is one of the country's largest for-profit educators, making it a bellwether for the now tumultuous industry.

Enrollments soared for the owner of the University of Phoenix and other for-profit schools early in the recession, as the weak economy and high unemployment made education more appealing for job-seekers. But new, stricter government regulations on student loans enacted last summer, negative media reports on the for-profit sector and moves by these education providers to raise admissions standards has taken a toll on enrollment.

Apollo lowered its expectations for enrollment and operating profit on Tuesday, saying changes in how it finds students, more competition from other schools and the improving labor market hurt its fiscal second quarter results.

The company said that it expects new students enrolling in degree programs for the period to be flat to up by a low-single-digit percentage, versus its prior expectation of a roughly 13 percent gain, when it reports its second quarter on March 26. The company expects new student enrollments to fluctuate for the rest of the year.

Apollo also cut its operating profit outlook for its fiscal year to miss analyst expectations. The news sent Apollo's shares down more than 12.5 percent in afternoon trading, dropping $6.44 to $44.96.

A representative for Apollo was not immediately available Tuesday to comment further.

"While we are disappointed with this development, this is another sign, in our view, that the recovery in this sector is still some ways off," BMO Capital Markets analyst Jeffrey Silber said in a research note.

Competitor's stock prices were dragged down by the news.

1 of 2

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 17,098.45 +18.88 0.11%
S&P 500 2,003.37 +6.63 0.33%
NASDAQ 4,580.2710 +22.5760 0.50%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs