Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Someone apparently forgot to bring the apple to Wall Street this morning, with shares of secondary education company Strayer Education (Nasdaq: STRA) getting drubbed by 14% in intraday trading following its second-quarter earnings report.

So what: The traditional classroom and Internet education company's second-quarter results weren't all that bad. The company beat EPS estimates by $0.14 and just marginally missed revenue projections, coming in at $163.8 million versus the $166 million consensus. Where shareholders really got a rude awakening was in Strayer's third-quarter guidance. New student enrollment plunged 21%, while continuing student enrollment fell 5%, which contributed to the company's EPS guidance of $1.04-$1.06. This is a mile short of the $1.37 the Street had been looking for.

Now what: New government regulations concerning who qualifies for financial aid appear to be hitting home for the online education sector. This week, ITT Educational Services (NYSE: ESI) also reported a mammoth 19.9% drop in new student enrollment. With much of the sector still to report, this has all the makings of a bloodbath. Perhaps the only company with any momentum heading into earnings season in this sector is Rising Star buy Bridgepoint Education (NYSE: BPI). Outside of Bridgepoint, I fully expect enrollments to be down across the board. Avoiding this sector altogether may put you at the top of the class.

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