(RTTNews) -  Online post-secondary education services provider Capella Education Co. (CPLA: News ) reported Tuesday an increase in third-quarter profit, helped by over 28% growth in revenues. On a per share basis, earnings came in above analysts' estimate by 6 cents.

For the third quarter, net income rose to $9.78 million or $0.57 per share from $5.77 million or $0.34 per share in the previous year. On average, 17 analysts polled by Thomson Reuters expected the company to report earnings of $0.51 per share for the third quarter. Analysts' estimates typically exclude special items.

Operating income advanced 83.3% to $14.54 million from $7.94 million. Operating margin for the period increased to 17.4% from 12.2% for the comparable period of fiscal 2008.

Revenues for the quarter surged 28.1% to $83.57 million from $65.24 million. Fourteen analysts were expecting revenue of $81.24 million for the third quarter.

Total active enrollment went up 27.7% to 30,738 learners from 24,063 learners a year ealier.

Commenting on the results, Kevin Gilligan, chief executive of Capella Education, said, "Our results were driven by strong demand fundamentals and solid execution across the business, reflected particularly in enrollment growth in all of our degree programs and in the success of new product introductions including our newest market, Public Service Leadership."
For the nine-month period, net income rose to $27.66 million or $1.62 per share from $17.62 million or $1.01 per share in fiscal 2008. Revenues grew 22.2% to $240.10 million from $196.54 million.

Looking ahead, for the fourth quarter, Capella expects revenue to improve 22.5% to 23.5% and total enrollment to grow by 25.5% to 26.5%, compared to the same period in 2008. The company currently projects operating margins to be around 23% to 24% of total revenue.

Lois Martin, chief financial officer of the company, said that revenue growth would be less than total enrollment growth, chiefly because the revenue impact of fewer scheduled colloquia in the fourth quarter as compared to the prior year.

For the full year, the company anticipates revenue growth of slightly over 22% and average quarterly enrollment to increase by about 24.5% over the previous year. Capella also forecasts annual operating margins to range between 18.5% and 19.0%.

CPLA is currently trading at $73.25, up $3.17 or 4.52%, on the NASDAQ.

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by RTT Staff Writer

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