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Apollo Group Profit Trounces Estimate


For profit education company Apollo Group, Inc. (APOL) said Monday after the markets closed that its third quarter profit fell 37% from last year, hurt mainly by lower enrollment at the University of Phoenix.

However, the company's quarterly earnings per share, excluding items, came in well above analysts' expectations. At the same time, the company raised its operating earnings outlook for the fiscal year 2012.

Apollo Group shares are currently gaining 7.21% in after hours trading after closing the day's regular trading session at $32.47, down $1.08 or 3.22%. The shares trade in a 52-week range of $30.93 to $58.29.

Apollo Group is the parent of the University of Phoenix. Degreed Enrollment at the University of Phoenix dropped 13.1% year-over-year to 346,300 in the third quarter. University of Phoenix New Degreed Enrollment fell 8% in the quarter as compared to a year earlier.

For the third quarter ended May 31, 2012, the Phoenix, Arizona-based company reported net income of $134.0 million or $1.13 per share, compared to $212.4 million or $1.51 per share for the year-ago quarter.

Excluding items, earnings for the latest quarter were $142.3 or $1.20 per share.

On average, 18 analysts polled by Thomson Reuters expected the company to earn $0.97 per share for the third quarter. Analysts' estimates typically exclude special items.

Net revenue for the third quarter fell 8.5% to $1.13 billion from $1.24 billion in the same quarter last year, mainly due to lower enrollment at the University of Phoenix. Sixteen analysts had a consensus revenue estimate of $1.12 billion for the third quarter.

During the third quarter, the company repurchased about 9.0 million shares of its common stock for $329.0 million. Subsequent to May 31, 2012, the company repurchased about 0.5 million shares at a total cost of $15.0 million, resulting in $48.5 million remaining of the current share repurchase authorization.

For the fiscal year 2012, the company now expects net revenue of $4.2 billion to $4.3 billion, compared to its prior guidance of $4.1 billion to $4.3 billion. Analysts currently expect the company to post revenue of $4.28 billion for the fiscal year 2012.

However, the company raised its fiscal 2012 operating earnings outlook to a range of $700 million to $740 million from its previous outlook of $625 million to $725 million.

by RTTNews Staff Writer

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