By William Trent, CFA of Stock Market Beat

Corinthian Colleges (COCO) reported earnings:

Comparing the third quarter of fiscal 2007 with the same quarter of the prior year:

* Net revenue was $250.5 million versus $250.3 million.

* Total student population was 68,175 versus 69,403.

* Total student starts were 24,457 versus 24,647.

* Operating income was $18.6 million compared with operating income of $19.8 million. Excluding severance expenses of $1.2 million, Q3 07 operating income was $19.8 million, flat with the same quarter of the prior year.

* Net income was $12.0 million compared with $14.7 million.

* Diluted earnings per share were $0.14 versus $0.17, in line with the Company’s previous guidance of $0.14 – $0.16. Excluding severance expenses of $0.01 per share, diluted earnings per share were $0.15 in Q3 07.

Analysts were expecting the company to earn $0.14 on $253 million in revenue. COCO’s decline in enrollments contrasts with some of its peers, such as Small Cap Watch List and Mid Cap Watch List member Apollo Group (APOL) or Large Cap Watch List member ITT Educational Services (ESI). However, it does share a less favorable metric with those peers:

Educational services expenses were 56.7% of revenue in Q3 07 versus 55.1% in Q3 06. The increase was mainly the result of higher occupancy and bad debt expenses. Bad debt expense was 4.8% of revenue in Q3 07 versus 4.0% in Q3 06.

The company issued EPS guidance of $0.12-$0.13 for its fourth quarter, which ends in June. The consensus expectation had been for $0.14.

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