University of Phoenix lays off 900 after student exodus

30 Jun 2015 | Author: | No comments yet »

Apollo Education Drops 5% on Lower Outlook.

Apollo Education Group Inc., owner of the University of Phoenix, slid as much as 16 percent after it lowered profit and revenue forecasts and said enrollment will fall by 50,000 next year.

Operating income excluding certain items will be $190 million to $200 million for the year ending in August, while revenue will be $2.6 billion to $2.62 billion, Apollo said in a statement late Monday. Apollo’s enrolment numbers have been under pressure as stricter regulation has reduced for-profit colleges’ share of US financial aid for students that such schools depend on for most of their revenue.

Enrollment at for-profit colleges has been declining as Congress, U.S. regulators and state attorneys general investigate industry recruitment practices, and concerns about student debt rise. Delphi Automotive PLC DLPH, -0.15% on Monday released a statement clarifying that its driverless vehicle was not involved in a near-miss incident with a Google Inc. Apollo will phase out some two-year degree programs with low retention rates, raise admissions criteria and focus on major metropolitan markets, Chief Executive Officer Gregory Cappelli said. “We want our reputation back like we used to have as an operator of a university that has high outcomes,” Cappelli said on a conference call Monday with analysts and investors.

Apollo will also move away from starting classes every week, and will push students to manage their own financial aid, academic planning, scheduling, and applications, Cappelli said. Apollo’s shares fell 4 per cent to $US14.92 ($19.43) in recent after-hours trading as revenue missed expectations and the company lowered its guidance for the fiscal year.

The company has moved to shut some of its locations and trim jobs, while also expanding abroad Since its last financial report, Apollos’s chief financial officer has resigned, rival Corinthian Colleges Inc. filed for bankruptcy protection and another competitor, ITT Educational Services Inc., became the target of a Securities and Exchange Commission fraud investigation. Total enrollment reached about 460,000 five years ago, largely because of late founder John Sperling’s drive to enroll students in two-year associate’s degree programs.

XOM, +0.31% and BP PLC BP, -1.13% suspended its Canadian arctic exploration program in the Beaufort Sea which holds billions of barrels worth of oil reserves. The decrease was primarily attributable to $600.7 million of net payments on borrowings, $74.3 million for capital expenditures, $40.7 million of share repurchases (which includes $2.6 million of share repurchases for tax withholding requirements on share-based awards), $34.5 million paid for contingent consideration, and $21.2 million for an acquisition.

Although Greece’s stock market is closed this week, shares of Greek companies listed in the U.S. were all in the red Monday as the country took a step closer to default. The Global X FTSE Greek 20 ETF GREK, +2.90% a U.S.-listed exchange-traded fund that tracks 20 publicly traded Greek companies, also tumbled 20% as Greece failed to secure an extension on its bailout package and opted to seek a referendum on whether the country should adopt more austerity measures in exchange for funds. The Company offers the following revised outlook for fiscal year 2015 based on the business trends observed during the third quarter of fiscal year 2015, as well as management’s current expectations of future trends.

However, Open Colleges’ operating costs are period costs that are expensed as incurred and a substantial portion are incurred before, or soon after, the students begin their programs. Accordingly, as a result of Open Colleges’ enrollment growth, service model, and cost structure, Apollo Global’s operating results are negatively impacted in the near term. Management uses, and chooses to disclose to investors, these non-GAAP financial measures because: (i) such measures provide an additional analytical tool to clarify the Company’s results from operations and help to identify underlying trends in its results of operations; (ii) as to the non-GAAP earnings measures, such measures help compare the Company’s performance on a consistent basis across time periods; and (iii) these non-GAAP measures are employed by the Company’s management in its own evaluation of performance and are utilized in financial and operational decision-making processes, such as budgeting and forecasting. Adjusted Operating Income (Loss) excludes depreciation and amortization and certain other items and is intended to provide an indicator of our operating performance across time periods due to the impact of acquisitions.

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