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Laureate Education Q1 Profit Falls; Updates FY20 Outlook - Quick Facts

Laureate Education, Inc. (LAUR) on Thursday reported that its net income for the first quarter was $98.3 million or $0.47 per share, down sharply from $194.3 million or $0.85 per share in the year-ago period.

The latest quarter's results reflect a discrete tax benefit, while the year-ago period's results were largely attributable to gains from asset sales.

Revenue for the quarter decreased 12 percent to $528.6 million from $601.1 million in the pior-year quarter, due primarily to the weakening of foreign currencies against the U.S.

On average, analysts polled by Thomson Reuters expected the company to report loss of $0.45 per share for the quarter on revenues of $565.28 million. Analysts' estimates typically exclude special items.

Total enrollments decreased 5 percent in the quarter and were down 2 percent excluding the divestiture of UniNorte Brazil in the prior year. New enrollments decreased 18 percent, down 6 percent, adjusted for the timing of semester start dates and excluding the divestiture of UniNorte Brazil in the prior year.

Laureate had previously said its board of directors has authorized the company to explore strategic alternatives for each of its business units, including sales, spin-offs or business combinations.

However due to the COVID-19 pandemic and its continuing effect on market conditions, the company noted that the strategic review is progressing at a slower pace than anticipated.

There can be no assurance as to how long the exploration of strategic alternatives will take or whether these processes will result in the completion of any transaction, the company said.

Looking ahead to fiscal 2020, Laureate Education updated its financial outlook assuming two scenarios due to the COVID-19 pandemic.

The company forecasts full-year revenues in the range of $2.675 billion to $2.775 billion and total enrollments to be approximately 830,000 students, assuming gradual reopening of campuses in the second half of 2020.

The company projects revenues in a range of $2.575 billion to $2.675 billion; and total enrollments to be about 780,000 students, assuming COVID-19 resurgence in second half of 2020.

The Street expects the company to report revenues of $3.11 billion.

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