ITT Educational Services Inc. (ESI) said Thursday its third quarter profit jumped 50.2% over last year, predominantly driven by higher student enrollment. The company's quarterly earnings breezed ahead of the Street consensus, as did quarterly revenues. The company's bad debt expenses, as well as operating expenses grew over the year-ago, however. ITT Educational's shares lost more than 7% following the news on the New York Stock Exchange.
ITT Educational posted net income of $75.4 million for the third quarter, up 50.2% from $50.2 million in the prior year quarter. Earnings per share rose 56.3% to $2.00 from $1.28 in the previous year quarter. On average, analysts polled by Thomson Reuters expected the company to report earnings of $1.97 per share for the third quarter. Analysts' estimates typically exclude special items.
Third quarter revenue increased 33.6% to $339.6 million from $254.3 million in the same quarter last year. Fourteen analysts had a consensus revenue estimate of $334.87 million for the third quarter.
New student enrollment in the third quarter grew 27.2% to 27,738 from 21,807 in the year-ago quarter. Total student enrollment rose 28.7% to 79,208 from 61,556 as of September 30, 2008.
Operating margin increased 430 basis points to 36.1% from 31.8% in the previous year quarter.
As a percentage of sales, bad debt expenses rose 180 basis points to 6.8% in the third quarter from 5% in the third quarter of 2008.
Total costs and expenses for the third quarter increased to $216.9 million from $173.5 million in the prior year quarter.
For the nine-month period of 2009, the company reported net income of $209.2 million or $5.45 per share, compared to $140.0 million or $3.56 per share in the previous year period.
Revenue for the period increased 28.5% to $944.8 million from $735.5 million in the prior year period.
ESI is currently trading at $102.63, down $7.80 or 7.06% on a volume of 4.23 million shares.
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