The 10-second takeaway
For the quarter ended May 31 (Q3), Apollo Group missed estimates on revenues and crushed expectations on earnings per share.
Compared to the prior-year quarter, revenue shrank significantly. Non-GAAP earnings per share shrank. GAAP earnings per share dropped significantly.
Gross margins were steady, operating margins contracted, net margins dropped.
Apollo Group reported revenue of $946.8 million. The 12 analysts polled by S&P Capital IQ expected to see a top line of $966.1 million on the same basis. GAAP reported sales were 16% lower than the prior-year quarter's $1.13 billion.
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 $1.05. The 14 earnings estimates compiled by S&P Capital IQ predicted $0.85 per share. Non-GAAP EPS of $1.05 for Q3 were 13% lower than the prior-year quarter's $1.20 per share. GAAP EPS of $0.71 for Q3 were 37% lower than the prior-year quarter's $1.13 per share.
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.
For the quarter, gross margin was 58.4%, much about the same as the prior-year quarter. Operating margin was 20.6%, 40 basis points worse than the prior-year quarter. Net margin was 8.4%, 350 basis points worse than the prior-year quarter. (Margins calculated in GAAP terms.)
Next quarter's average estimate for revenue is $824.9 million. On the bottom line, the average EPS estimate is $0.24.
Next year's average estimate for revenue is $3.66 billion. The average EPS estimate is $2.83.
The stock has a two-star rating (out of five) at Motley Fool CAPS, with 791 members out of 937 rating the stock outperform, and 146 members rating it underperform. Among 246 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 197 give Apollo Group a green thumbs-up, and 49 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 $22.38.
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