Career Education Corp. (CECO), an educational service provider, Wednesday reported a lower second-quarter profit, hurt by higher expenses, even as revnues increased 5.7%.
The Hoffman Estates, Illinois-based company reported net income for the second quarter of $6.5 million or $0.07 per share, compared to $12.7 million or $0.14 per share in the year-ago quarter.
On average, twelve analysts polled by Thomson Reuters expected the company to earn $0.19 per share for the quarter. Analysts' estimates typically excludes special items.
Total revenues for the quarter increased 5.7% to $440.7 million from $417.0 million in the prior-year quarter. Thirteen analysts had a revenue consensus of $418.79 million for the second quarter.
Excluding the Transitional Schools, revenue was $436.1 million in the second quarter, a 9.2% increase from $399.5 million in the second quarter of 2008.
Gary McCullough, president and chief executive officer, said, "We achieved our highest rate of student population and revenue growth since 2005, resulting in an increase in operating efficiency in the quarter. While our work is by no means complete, these results reflect the progress we have made in furthering our strategy and add to my confidence in our ability to achieve our 2010 milestones."
University revenue rose 13% to $198.3 million from $175.4 million a year ago, while health education revenue rose 27% to $73.4 million from $57.9 million. Culinary Arts revenue declined 5% to $74.2 million from $77.9 million in the prior-year period, and Art & Design revenues edged up 1% to $64.0 million from $63.5 million last year.
Revenue for the Transitional Schools was $4.6 million in the second quarter of 2009, as compared to $17.5 million in the second quarter of 2008, reflecting a reduction in student population associated with the teach-out of these operations.
Operating income was $11.1 million for the second quarter of 2009, a 34% decrease from $16.9 million of operating income during the second quarter of 2008. Excluding items, operating income was $40.7 million in the second quarter of 2009, up 70% from $24.0 million in the second quarter of 2008.
Total operating expenses increased to $429.64 million from $400.13 million a year ago. Total other expense was $314 thousand, compared to other income of $2.67 million in the year-ago quarter.
Total new student starts increased 26% to 24,470 from 19,360 in the comparable period last year.
During the quarter, the company repurchased 4.8 million shares of the company's common stock for about $100.0 million at an average price of $20.69 per share.
On August 4, 2009, the company's board authorized the use of an additional $200.0 million to repurchase outstanding shares of its common stock under its stock repurchase program. The new authorization is in addition to the $55.5 million available under the program as of June 30, 2009.
For the six-month period the company's net income increased to $29.75 million or $0.33 per share from $29.08 million or $0.32 per share in the same period last year.
Total revenue for the first half of fiscal year 2009 grew to $878.17 million from $868.93 million in the similar period of 2008.
CECO closed Wednesday's regular trading at $23.88, up $0.13 or 0.55%, on a volume of 1.23 million shares. However, the stock lost $0.48 or 2.01%, and traded at $23.40 in after hours.
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