The 10-second takeaway
For the quarter ended March 31 (Q1), Career Education beat slightly on revenues and beat expectations on earnings per share.
Compared to the prior-year quarter, revenue dropped significantly and GAAP earnings per share dropped significantly.
Margins shrank across the board.
Career Education reported revenue of $434.1 million. The nine analysts polled by S&P Capital IQ anticipated sales of $429.6 million on the same basis. GAAP reported sales were 20% lower than the prior-year quarter's $543.4 million.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.
EPS came in at $0.41. The nine earnings estimates compiled by S&P Capital IQ forecast $0.24 per share. GAAP EPS of $0.77 for Q1 were 19% lower than the prior-year quarter's $0.95 per share. (The prior-year quarter included -$0.01 per share in earnings from discontinued operations.)
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.
For the quarter, gross margin was 64.8%, 410 basis points worse than the prior-year quarter. Operating margin was 10.8%, 880 basis points worse than the prior-year quarter. Net margin was 12.0%, 140 basis points worse than the prior-year quarter.
Next quarter's average estimate for revenue is $389.4 million. On the bottom line, the average EPS estimate is $0.12.
Next year's average estimate for revenue is $1.56 billion. The average EPS estimate is $0.47.
The stock has a three-star rating (out of five) at Motley Fool CAPS, with 173 members out of 198 rating the stock outperform, and 25 members rating it underperform. Among 48 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 41 give Career Education a green thumbs-up, and seven give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Career Education is hold, with an average price target of $8.63.
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Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor of Motley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. 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.