Education stocks took a beating Wednesday as Apollo Group (APOL Quote) shares plummeted on an increase in its bad debt expense for the fourth quarter.
Apollo's earnings report gave aid to bears looking for weakness in a sector that has performed very well over the previous six months. Apollo said that its bad debt expense rose to 4.1% in the quarter from 3.8% a year ago, raising concerns that education companies would not sail through the worsening credit environment completely unscathed.
Apollo, which operates the University of Phoenix, had an otherwise glowing earnings report. The company reported a profit of 77 cents a share, topping the average analyst forecast of 65 cents a share, according to Thomson Reuters. Revenue rose 26% from a year ago to $876.1 million as enrollment jumped 20%. ...
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