Apollo Group Inc (APOL), Strayer Education Inc (STRA): Enrollments Continue to Decline at For-Profit Schools

Are there any bright spots?
The earnings season wasn’t all bad for shareholders, though.

Shares of DeVry Inc. (NYSE:DV) took a big jump in early February. Though revenue was down 3.6% for the fourth quarter, earnings were up 500% — mainly due to a really poor fourth quarter last year and a decrease in student service expenses.

That said, undergraduate enrollment in the school’s largest segment — business, technology and management — declined 14.9%, while new student enrollment declined by 4.7%.

Education Management Corp (NASDAQ:EDMC) was another stock that pleased shareholders recently. I would have to say, however, that this was more due to incredibly low expectations being beat than a significant improvement in the underlying business.

For the fourth quarter, the company logged a revenue decrease of 11.2%, combined with an earnings decrease of almost 50%. More important, total average enrollment fell by 12.7%, while new student enrollment dropped even more — by 21.9%.

Is there a takeaway?
Though there were some bright spots for investors, there’s no doubt that the for-profit education model remains in flux. Where exactly things will stabilize is impossible to tell — but for now, the chickens are coming home to roost for an industry that put easy profits far higher on its list of priorities than the students it was serving.

The article Enrollments Continue to Decline at For-Profit Schools originally appeared on Fool.com and is written by Brian Stoffel.

Fool contributor Brian Stoffel has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned.

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