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What: Shares of ITT Educational Services
So what: Education failed miserably at the end of the year as total enrollment fell 14% to 73,255 students. As a result, revenue fell 10% to $368.3 million in the fourth quarter and net income dropped 22% to $97.5 million, or $3.15 per share.
The revenue and earnings figures both topped estimates, but the company certainly isn't heading in the direction investors hoped for.
Now what: Stocks don't usually drop on an earnings beat like this, but ITT is losing students and the future is murky right now. Earnings are expected to drop again in 2012 and if students keep leaving for other education providers that doesn't bode well for the stock. There is some value in shares if management can turn the trends around, but I would like to see some progress before I try to catch a falling knife right now.
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Fool contributor Travis Hoium does not have a position in any company mentioned. You can follow Travis on Twitter at @FlushDrawFool, check out his personal stock holdings or follow his CAPS picks at TMFFlushDraw. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.