The 10-second takeaway
For the quarter ended Feb. 28 (Q2), Apollo Group beat slightly on revenues and beat expectations on earnings per share.
Compared to the prior-year quarter, revenue dropped. Non-GAAP earnings per share dropped significantly. GAAP earnings per share dropped significantly.
Margins dropped across the board.
Apollo Group reported revenue of $834.4 million. The 15 analysts polled by S&P Capital IQ hoped for sales of $822.8 million on the same basis. GAAP reported sales were 13% lower than the prior-year quarter's $962.7 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 $0.34. The 18 earnings estimates compiled by S&P Capital IQ averaged $0.18 per share. Non-GAAP EPS of $0.34 for Q2 were 41% lower than the prior-year quarter's $0.58 per share. (The prior-year quarter included $0.02 per share in earnings from discontinued operations.) GAAP EPS of $0.12 for Q2 were 76% lower than the prior-year quarter's $0.51 per share. (The prior-year quarter included $0.02 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 54.0%, 180 basis points worse than the prior-year quarter. Operating margin was 8.1%, 430 basis points worse than the prior-year quarter. Net margin was 1.6%, 500 basis points worse than the prior-year quarter. (Margins calculated in GAAP terms.)
Next quarter's average estimate for revenue is $954.0 million. On the bottom line, the average EPS estimate is $0.82.
Next year's average estimate for revenue is $3.70 billion. The average EPS estimate is $2.71.
The stock has a two-star rating (out of five) at Motley Fool CAPS, with 788 members out of 941 rating the stock outperform, and 153 members rating it underperform. Among 252 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 198 give Apollo Group a green thumbs-up, and 54 give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Apollo Group is hold, with an average price target of $26.50.
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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. The Motley Fool has no position in any of the stocks mentioned. 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.