Earnings fell by half despite higher revenue in Corinthian Colleges' ( COCO) first quarter as the company spent more to attract students and pay teachers at its for-profit campuses.

Corinthian earned $7.4 million, or 8 cents a share, in the quarter, compared with $14.6 million, or 16 cents a share, a year ago. The latest quarter reflected an expense of 1 cent a share for stock-option costs. Analysts were forecasting earnings of 8 cents a share in the 2005 period.

Revenue rose 5% from a year ago to $236.3 million, about $3 million better than expected. The company said its total student population was 68,262 in the quarter compared with 70,500 a year ago, while total student starts fell 4.8% to 26,753. The decline in starts was 4.2% excluding the effect of Hurricane Katrina.

Corinthian said its educational services expense was 58.1% of revenue in the most recent quarter compared with 55% a year ago, while marketing and administrative expenses were 26.6% of revenue compared with 24.9% a year ago. The bad debt expense rose to 5.7% of revenue from 5% a year ago.

The company said it expects to earn 10 cents to 12 cents a share in the second quarter, including a penny a share of options expense. Analysts surveyed by Thomson First Call were expecting earnings of 16 cents a share in the quarter.

For the year ending next June, the company expects to earn 53 cents to 59 cents a share, including 7 cents a share of options expense. The year guidance doesn't include an expected penny a share of expense associated with Katrina and a 2-cent charge on an asset sale. Analysts were expecting earnings of 58 cents a share for the year.

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