Why ITT Educational Services Shares Jumped

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: Shares of ITT Educational Services (NASDAQOTH: ESINQ  ) were looking smarter today, gaining as much as 16% after an impressive third-quarter earnings report.

So what: The for-profit educator said earnings per share came in at $0.80, much better than estimates at $0.55, though that was down from $1.83 a year ago. Revenues also dropped 17.6% to $259.4 million, but that was still better than the consensus at $251.9 million. Management did not provide commentary in the earnings release, but there was one bright spot despite the drop in profits and sales. New student enrollment, a key industry figure, increased 5.2% in the quarter, indicating that the company may be reversing its recent enrollment decline. Overall enrollment still drove 7.1%, driving down income.

Now what: In addition to the earnings beat, ITT bumped up its full-year EPS guidance to $4.00-$4.20 from $3.50-$4.00, above analyst estimates at $3.86. As we saw yesterday from Apollo Group, whose shares also rallied after a strong earnings beat, the for-profit education industry seems to be bottoming out. With continuing pressure from state and federal governments on the industry's practices, I wouldn't expect the industry to reach its former heights, but there may be some short-term upside in the sector.  

Stocks for the long haul
The best investing approach is to choose great companies and stick with them for the long term. The Motley Fool's free report "
3 Stocks That Will Help You Retire Rich" names stocks that could help you build long-term wealth and retire well, along with some winning wealth-building strategies that every investor should be aware of. Click here now to keep reading.

Read/Post Comments (0) | Recommend This Article (0)

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2697281, ~/Articles/ArticleHandler.aspx, 9/26/2016 8:21:54 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated Moments ago Sponsored by:
DOW 18,094.83 -166.62 -0.91%
S&P 500 2,146.10 -18.59 -0.86%
NASD 5,257.49 -48.26 -0.91%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

9/26/2016 3:59 PM
ESINQ $0.12 Up +0.01 +9.09%
ITT Educational Se… CAPS Rating: **