Shares of DeVry, Inc. (DV) tumbled almost 11 percent in extended trade on Tuesday after the educational services provider reported a 15 percent decline in profit for the third quarter on lower revenues and student enrollments. Revenues for the quarter missed analysts' expectations, while adjusted earnings beat their estimates.
Total new student enrollments for the quarter decreased 6.4 percent from the prior-year period to 18,468, while total students enrolled declined 6.7 percent to 119,623. Enrollment results continue to be impacted by lower cyclical demand among the university's target segment of students.
For the March 2013 session at DeVry University, new undergraduate enrollments decreased 21 percent from the year-ago period to 5,146. Total undergraduate students decreased 17 percent from last year to 47,537.
At the graduate level, including Keller Graduate School of Management, total coursetakers in the March session decreased 18 percent from last year to 19,075. The total number of online undergraduate and graduate coursetakers at DeVry University in the March session declined 11 percent from the year-ago period to 60,834.
However, at the company's medical and healthcare segment, DeVry recorded an18 percent increase in new student enrollment at Carrington Colleges Group and a 17 percent increase in new enrollments at Chamberlain College of Nursing. The company said that enrollment for the May semester at DeVry Medical International will be reported with the fourth-quarter and year-end results on August 8, 2013.
Daniel Hamburger, DeVry's president and chief executive officer said, "While most of our institutions are performing well, we were disappointed with new student enrollment at DeVry University. We are focused on better communicating the return on educational investment of DeVry University degrees to potential students. In addition, we are aggressively managing our costs and now expect to achieve $100 million in cost savings this fiscal year."
DeVry's net income for the third quarter declined to $56.82 million or $0.88 per share from $67.13 million or $1.00 per share last year. The latest quarter's results include after-tax restructuring charges of $1.27 million or $0.02 per share, related to severance and real estate consolidation.
Excluding the one-time items, adjusted net income for the quarter was $58.09 million or $0.90 per share. On average, 15 analysts polled by Thomson Reuters expected the company to earn $0.82 per share for the quarter. Analysts' estimates typically exclude special items.
Revenues for the quarter decreased 6 percent to $508.75 million from $540.81 million in the same period last year. Analysts had a consensus revenue estimate of $516.64 million.
DV closed Tuesday's regular trading session at $34.03, up $1.16 or 3.53 percent on a volume of 1.47 million shares. However, in after-hours, the stock declined $3.73 or 10.96 percent to $32.87.
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