Technology-based education company K12 Inc. (LRN) Friday reported an increase in net profit for the first quarter of fiscal 2010, benefited mainly by a 20% rise in revenues. On a per share basis, earnings per share beat Street view by a penny. The company also provided a better-than-expected revenue guidance for full year 2010. K12 shares are currently trading up more than 7%.
For the first quarter, net earnings attributable to the company were $7.08 million as compared with $5.91 million in the prior- year period. On a per share basis, net earnings attributable to shareholders rose to $0.24 from $0.20 last year.
On an average, eight analysts polled by Thomson Reuters expected K12 to earn $0.23 per share for the quarter. Analysts' estimates typically exclude special items.
Revenues for the period surged to $106.33 million from $88.63 million in the first quarter of fiscal 2009, reflecting strong enrollment growth. Analysts expected the company to generate revenues of $106.13 million during the quarter.
Average enrollments for the quarter were 69,542, an increase of 23.7% from the corresponding period prior year.
Total costs and expenses incurred by K12 during the quarter increased to $93.66 million from $79.45 million in the 2008-year period. Instructional costs and services for the period were $58.09 million compared to $54.42 million in fiscal 2009. Selling, administrative, and other operating expenses rose to $33.33 million from $22.84 million, and product development costs incurred by the company were $2.24 million versus $2.20 million a year earlier.
Income tax expense for the first quarter was $5.4 million, representing an effective tax rate of 43.6%, compared to an income tax expense of $3.8 million in the prior year.
Looking forward, K12 expects net income for the full year 2010 to be between $14.6 million and $17.1 million. Analysts currently anticipate the company to earn $0.58 per share for fiscal 2010.
The company is forecasting full fiscal year 2010 revenues of approximately $380 million to $390 million, while analysts are looking for revenues of $378.6 million for the year.
In Friday's regular trading session, LRN is currently trading on the New York Stock Exchange at $16.93 per share, up $1.13 or 7.15% on a volume of 201,815 shares. In the past 52-week period, the shares have been trading in a range of $11.95 to 26.12.
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