Shares of education companies posted solid gains Wednesday, as investors cheered an 82% jump in
second-quarter earnings per share.
A slew of analysts raised their profit estimates on Career Education Wednesday after the firm trounced consensus estimates in the second quarter. The news sent shares up 12%, or $9.22, to $82.12 in late trading.
Other stocks in the group also rose sharply, with
up 5.8% at $57.96,
up 4% at $51.16 and
higher by 5.6% at $64.11.
"This was a quarter to remember for Career Education," said William Blair analyst Matthew Litfin. "It was one that we believe will be remembered for having vaulted the company into a short list of truly great emerging growth companies in the United States."
Career Education, which offers post-secondary education, reported earnings of 40 cents a share in the quarter, up from 22 cents last year and well above analysts' estimates of 31 cents a share. The firm also raised its estimates for the full year to between $2.10 a share and $2.12 a share on revenue of $1.139 billion to $1.145 billion. The firm had previously projected earnings of $1.90 to $1.92 on revenue of $1.029 billion to $1.038 billion.
Analysts surveyed by Thomson First Call expect the company to earn $1.94 a share in 2003.
The company has benefited from a big increase in online students and said this business is on course to generate about $120 million in revenue this year. Full-time students at American InterContinental University Online should reach 7,000 by July 31, a sevenfold increase. The total student population is projected to be 63,000 on July 31, up 55%, with about 8,200 students attributable to a recent acquisition.
"It is our belief that, given the consistency of results, solid core brand building and lower overall risk profile, these companies are poised to deliver higher-quality and more consistent earnings," said Thomas Weisel analyst Fred McCrea.