Shares of Adtalem Global Education Inc. (NYSE:ATGE), a global provider of for-profit university and educational programs, were declining 15% as of 11:30 a.m. EDT on Friday after the company released disappointing fourth-quarter earnings.
Starting from the top, Adtalem posted revenue of $319.8 million during the fourth quarter, a modest 1.5% increase over the prior year, but well short of analysts' estimates calling for $352.5 million. Adjusted earnings per share checked in at $0.86, which was higher than the prior year's $0.75, but again short of analysts' estimates of $0.90.
In a press release, CEO Lisa Wardell said, "We continue to streamline and strategically align our portfolio to deliver consistent growth in areas of competitive differentiation for Adtalem, while driving further operating efficiencies across our organization, and balancing our capital allocation by investing in our institutions and providing direct returns to our owners."
The fourth-quarter results were particularly disappointing considering expectations were high once the Trump administration took over, because the Obama administration had placed stricter regulation and scrutiny on for-profit education. But the truth is, for-profit education companies still have a bad reputation for their sales tactics and student churn. And, despite a more favorable Trump administration, Adtalem still has to adapt to get its business where investors are comfortable buying in. Friday's decline is reflective of that.