(RTTNews) - Apollo Group Inc. (APOL: News ), an education company, Monday said its third quarter profit increased from last year, driven by higher enrollment, with both quarterly earnings and revenue exceeding Street expectations.

Apollo, which provides higher education programs for working adults, is one of the few firms spared in the economic crisis. As the economy slows, more people tend to enroll in school, which should have a positive impact on education services providers.

The Phoenix, Arizona-based company reported third quarter net income of $201.1 million or $1.26 per share, up from $139.1 million or $0.85 per share in the prior year quarter.

Result for the year-ago quarter included a pre-tax charge of $1.6 million associated with the judgment in a securities class action lawsuit. That charge was reversed during the fourth quarter of fiscal 2008, when the trial court vacated the judgment. Excluding that charge, net income was $140.1 million or $0.85 per share in the third quarter of fiscal 2008.

On average, 20 analysts polled by Thomson Reuters expected the company to earn $1.12 per share for the third quarter.

Total revenue for the third quarter increased 26% to $1.05 billion from $835.22 million in the same quarter last year. Sixteen analysts had a consensus revenue estimate of $1.04 billion for the third quarter.

Apollo Group's degree enrollment grew 22% year-over-year to 420,700 during the third quarter.
Chas Edelstein, co-chief executive officer of Apollo Group, said, "We are pleased to report a record third quarter, driven largely by continuing increases in enrollments and improved student retention at University of Phoenix."

Selling and promotional expenses increased 19.6% to $243.6 million from $203.6 million in the previous year quarter. As a percentage of net revenue, selling and promotional expenses declined 120 basis points to 23.2% from 24.4% last year, due to continued improvement in enrollment counselor effectiveness, and more effective and efficient advertising at University of Phoenix.

During the third quarter of fiscal 2009, Apollo Group repurchased about 7.2 million shares of its common stock at a weighted average purchase price of $61.62 per share for a total expenditure of $444.4 million. On June 25, the board authorized an increase in the share repurchase program to an aggregate of $500 million.

Earlier this month, Apollo Group's unit, Apollo Global Inc., agreed to buy UK-based BPP Holdings Plc (BPP.L) for 620 pence per share in cash, valued at about US$540 million. The transaction is expected to close during Apollo Group's fourth quarter.

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