What to Expect From Apollo Education Earnings

Apollo Education Group Inc. (NASDAQ: APOL) will report its fiscal third-quarter financial results Monday after the markets close. The consensus estimates from Thomson Reuters call for $0.47 in earnings per share (EPS) on $698.57 million in revenue. In the same period of last year, the company posted EPS of $0.76 and revenue of $799.92 million.

Over the past few years, there has been a noticeable downward trend in for-profit education. Some of the decline may be self-inflicted, but some has come from an outright attack on for-profit education by Washington, D.C. What is interesting is that online-only universities have suffered, even as traditional universities are beginning to transfer their courses to an online classroom, or at least to offer many courses online. Apollo is no exception to the pressure. After all, it is the industry’s biggest face due to its University of Phoenix.

In its most recent earnings report, the company gave guidance on the fiscal third quarter as net revenue in the range of $690 million to $705 million, as well as around $85 million to $95 million in operating income.

Apollo is generally considered to be the face of the online-only and for-profit education system. The company’s woes may not be different from the rest of the industry. Either way, it seems difficult to imagine that it will have $85 million to $95 million in operating income next quarter. The industry woes have been so negative for so long that questioning guidance seems fair — or even prudent.

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This industry has been so battered and bruised for so long that it just comes naturally to question anything the companies say about their future. Considering that, the ultimate survivability seems fair to question as well. Shares are near multiyear lows.

Shares of Apollo were down 2.5% at $15.94 on Monday morning, a new 52-week low. The stock has a consensus analyst price target of $21.50 and a 52-week high of $34.55.

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