The 10-second takeaway
For the quarter ended June 30 (Q2), Career Education missed estimates on revenue and missed expectations on earnings per share.
Compared to the prior-year quarter, revenue shrank significantly and GAAP earnings per share dropped to a loss.
Margins contracted across the board.
Career Education notched revenue of $369.0 million. The 10 analysts polled by S&P Capital IQ expected revenue of $383.5 million on the same basis. GAAP reported sales were 26% lower than the prior-year quarter's $497.2 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 -$0.18. The 10 earnings estimates compiled by S&P Capital IQ forecast -$0.01 per share. GAAP EPS were -$1.52 for Q2 against $0.73 per share for the prior-year quarter.
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.
For the quarter, gross margin was 60.5%, 700 basis points worse than the prior-year quarter. Operating margin was -6.1%, 2,190 basis points worse than the prior-year quarter. Net margin was -27.2%, 3,830 basis points worse than the prior-year quarter.
Next quarter's average estimate for revenue is $348.3 million. On the bottom line, the average EPS estimate is -$0.27.
Next year's average estimate for revenue is $1.54 billion. The average EPS estimate is $0.32.
The stock has a two-star rating (out of five) at Motley Fool CAPS, with 171 members out of 201 rating the stock outperform, and 30 members rating it underperform. Among 50 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 39 give Career Education a green thumbs-up, and 11 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 $6.64.
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