Top Performer for Fri: Lincoln Edu. Services (LINC)

Earlier this week, Lincoln Educational Services Corporation (LINC - Snapshot Report) announced that third-quarter earnings and revenue will exceed its previous guidance.

Today, the company will end the week as a Zacks #1 Rank Top Performer, as shares muscled past another difficult session to gain more than 7.5%.

LINC is a leading and diversified for-profit provider of career-oriented post-secondary education. It offers degree and diploma programs in automotive technology, health sciences, skilled trades, business and information technology, and hospitality services.

It is part of the Schools industry on the Zacks #1 Rank List, which includes 220 stocks today. The list also includes 2 other names from this space: Bridgepoint Education, Inc. (BPI) and Universal Technical Institute, Inc. (UTI - Analyst Report).

A Better-Than-Expected Third Quarter

On Monday, LINC announced that third-quarter earnings and revenue will surpass its previous outlook, due to starts in the quarter to date. The company had anticipated earnings per share between 34 cents and 36 cents, with revenue at $134 million to $138 million.

(The Zacks Consensus Estimate for the quarter has stood still at 36 cents, most likely because LINC was vague and didn't offer a specific new guidance.)

It expects to enter the fourth quarter with about 9,000 more students than a year earlier, or around 5,600 more students on a same-school basis.

(At the same time, LINC also announced a public offering of 4 million shares of its common stock being sold by a selling stockholder.)

Earnings Estimates

The last 2 months have seen a sharp advance in earnings estimates for LINC. The Zacks Consensus Estimate for this year is at $1.43 per share; nearly 11% better than the $1.29 estimate from 60 days ago.

The Zacks Consensus Estimate for next year is up 15.4% in that timeframe to $1.80 per share from $1.56. The guidance is also approximately 26% better than the outlook for this year.

Second-Quarter Report

Sparking the upward analyst revisions was a strong second-quarter report on Aug 5, which included a raised outlook for 2009. The company stated that earnings per share would be between $1.40 and $1.45 per share, instead of its earlier guidance of $1.25 to $1.30.

Likewise, the revenue estimate was enhanced to between $518 million and $525 million, versus the previous outlook of $505 million to $515 million.

For the second quarter itself, LINC continued a string of better-than-expected quarterly profit performances. It announced earnings of 27 cents per share, beating the Zacks Consensus Estimate of 20 cents by 35%. Over the past 4 quarters, the company has put together an average surprise of 125%.

Revenue increased nearly 51% to $128.1 million.