Apollo Group (APOL) plunged 14% early Wednesday after the University of Phoenix parent missed third-quarter financial targets.
The Phoenix-based education outfit made $93 million, or 54 cents a share, for the quarter ended Aug. 31, down from the year-ago $106 million, or 58 cents a share. Revenue rose to $624 million from $592 million a year ago.
Analysts surveyed by Thomson Financial were expecting a 66-cent profit on sales of $635 million.
The news comes as Apollo struggles with a stoc option backdating probe. The company said its review shows that "various deficiencies in the process of granting and documenting stock options have been identified to date," though it hasn't quantified any accounting impact.
"Since January, we have focused on making significant strategic changes in two major areas of our business: marketing and retention," CEO Brian Mueller said. "Much of the work required to launch our marketing and branding efforts is complete and we are already seeing evidence of its effectiveness. Our retention and academic strategies are equally significant although more complex, and as such, they will take longer to implement. However, we are confident that our decision to invest in these improvements will benefit both our students and our shareholders over the long run."
Shares fell $6.78 to $41.90.