Top- and bottom-line results topped analysts' expectations for DeVry to earn $86.9 million, or $1.23 per share, on revenue of $563.8 million. While DeVry's total student roster grew, new undergraduate enrollment at its namesake university dropped 15.4%; at its Ross University, new student enrollment fell 8.2%. For Capella Education, new student enrollment plummeted 35.8%, and it forecast new student starts would be down 40% in the fiscal second quarter as the impact of increased competition and recent measures instituted to remain in compliance with new Department of Education regulations pressure enrollment standards.
Federal student aid is among the primary sources of income for for-profit education providers. Capella said tuition fee increases for the 2011-12 academic year would not be as severe as its previous tuition hikes, and the school said it would provide scholarships and grants in order to draw in more students. Larger rival Apollo Group ( APOL), operator of University of Phoenix, said in March that its new student starts dropped by 45%, and the school operator forecast declines in 2011 and 2012 revenue. Even so,
Earlier this year, Capella said it planned to reduce its non-faculty workforce by around 8%, or 125 positions, resulting in a charge of about $2 million in the quarter ending March 31, 2011 and an annualized cost savings of approximately $12 to $12.5 million. Capella's layoffs and new student enrollment forecast echoed that of
>>See our new stock quote page. Get more stock ideas and investing advice on our sister site, Stockpickr.com.