Dive Brief:
- Apollo Education Group’s stock price dropped and ratings analysts advised stockholders to sell following the company’s release of its third quarter earnings report.
- TheStreet Ratings Team calculates a drop in earnings per share of about 307% since the same quarter of last year — stockholders now earn 44 cents per share.
- Net Income, from the same quarter a year ago according to the Ratings Team, has dropped from $14.61 million last year to -$33.61 million now, a decrease of 330%.
Dive Insight:
Apollo Education Group is seeing less money from the federal government in the form of student aid and shrinking enrollment. The reputation of for-profit colleges in general is low, especially following the highly publicized collapse of Corinthian Colleges Inc. The government is less willing to subsidize their operations to such a high degree. Many for-profit education groups get 90% of their operating revenue from financial aid, a portion that far outstrips traditional colleges. With too-high student loans being a major concern for presidential contenders, the strict scrutiny will likely continue.
