Enrollment at the company’s Strayer University fell by 5% year-over-year, and across the company’s entire system, including online classes, enrollment was down 4%.
To cope with the falling enrollments, the company said it would raise tuition by 3% beginning in January. The increase is not expected to have a positive impact on revenue per student. Expenses in 2013 are expected to rise 1% to 2%, mainly to support the eight campuses the company opened in 2012. No new campuses are planned for next year.
The company guided fourth-quarter diluted EPS at $1.43 to $1.45 and full-year EPS at $5.73 to $5.75. The consensus estimates call for fourth-quarter EPS of $1.59 on revenues of $145.13 million, as well as full-year EPS of $5.83 on revenues of $564.44 million.
For fiscal year 2013, Strayer guided EPS at $5.40 to $5.60, compared with a consensus estimate of $5.56.
For all its troubles, Strayer is better off than Career Education Corp. (NASDAQ: CECO), which posted a quarterly loss of $0.50 last night after a decline of 23% in student enrollment. The company said it would close 23 campuses and cut 900 jobs.
Strayer’s shares are down more than 8% in premarket trading this morning, at $51.50 in a 52-week range of $54.81 to $120.00. The low was set yesterday and figures to go lower today. The consensus target price for the shares was around $80.00 before today’s report.