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What: Shares of for-profit educator DeVry (NYSE:DV) were headed to the top of the class today, climbing as much as 23%, after the company aced its earnings report.
So what: The parent of educational programs, including Becker Professional Education, turned in a per-share profit of $0.87, well ahead of the $0.56 that the market was expecting. Revenue slipped slightly, falling 3%, to $505 million, but that also beat expectations. At a time when for-profit colleges are struggling to maintain student levels, to crackdowns from the Obama administration on high student default rates, DeVry said that enrollment was growing at its health-care schools in the U.S. and Canada, and appears healthier than the market believed.
Now what: Devry's surprise report lifted the whole industry, as peers such as Apollo Group, Corinthian Colleges, and Strayer were all up at least 2.8%. Education stocks had fallen sharply in 2012, as revenues and enrollments declined, and some began to fear student loans -- the industry's gravy train -- would begin to dry up. DeVry's results seem to indicate that the worst may be over, as revenue appears to stabilizing, and profits look healthy. JPMorgan Chase upgraded DeVry on the news, saying that the educator's diversification strategy was working. DeVry has been among the more consistent stocks in a shaky industry, and today's report seems to confirm why.
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