This Day On The Street
Continue to site
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

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

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

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
Stocks Under $10

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

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

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
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
AAPL $92.23 -1.10%
FB $118.66 0.72%
GOOG $706.66 0.75%
TSLA $214.68 1.50%
YHOO $36.99 0.14%


Chart of I:DJI
DOW 17,641.30 -19.41 -0.11%
S&P 500 2,044.44 -6.19 -0.30%
NASDAQ 4,693.2580 -23.8360 -0.51%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs