It's been quite the mixed bag of news in the for-profit education industry these past few weeks. So far in October and early November, we've seen DeVry (NYSE:DV), ITT (NYSE:ESI), Laureate (NASDAQ:LAUR), and Strayer (NASDAQ:STRA) "beat estimates," while Career Education (NASDAQ:CECO) and Apollo Group (NASDAQ:APOL) missed badly. Last week, we heard from the newest member of the class, Lincoln Educational Services (NASDAQ:LINC), which debuted on the Nasdaq only last year.

And it looks like our new teacher needs some remedial instruction itself.

Bright and early Thursday morning, Lincoln turned in its third-quarter homework to Wall Street. By day's end, its papers were scarred with a bright red F. Revenues rose 8% to $84.5 million, but profits simply collapsed, down 57% year over year to $0.09 per share. How did more revenues result in less than half last year's profits? Mainly because increased spending on advertising and "growth initiatives" cut Lincoln's operating margin nearly in half.

Lincoln needs a lesson
Worse, CEO David Carney's explanation seems to show a fundamental misunderstanding of the role of an educator in society. Carney said the tight labor market is convincing many potential students to enter the workforce rather than seek higher education. He observed that many students, previously recruited and expressing an interest in enrolling at Lincoln schools after graduating from high school, later changed their minds when they were able to find jobs easily. In response, Lincoln decided it needed to . advertise more.

Now, Wall Street pundits will tell you that what really sank Lincoln's stock was forward guidance. Carney warned that revenues in Q4 were likely to approximate what the firm has accomplished all year long (i.e., 8% growth), and that although Lincoln continues to target 15% earnings growth long term, "it would be unrealistic for investors to expect [Lincoln] to reach those targets in 2006."

But to this Fool's mind, what's more worrisome than the guidance is Lincoln's attitude toward its customers -- its students. An educator's role should be to provide its students with the skills they need to land good jobs. If some prospective students are finding those jobs without the schooling, Lincoln should focus on educating the students who need its services. Instead, it sounds like what Lincoln tried to do is "sell" (through increased advertising) its customers something they didn't need. In going that route, Lincoln did its customers a disservice. And as last week's results show, it didn't help its shareholders much, either.

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Fool contributor Rich Smith does not own shares of any company named above. The Fool has a disclosure policy.