We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Universal Technical (UTI) Up 2.9% Since Earnings Report: Can It Continue?
Read MoreHide Full Article
It has been about a month since the last earnings report for Universal Technical Institute Inc. (UTI - Free Report) . Shares have added about 2.9% in that time frame, underperforming the market.
Will the recent positive trend continue leading up to the stock’s next earnings release, or is it due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Universal Technical Q1 Loss Narrower than Expected
Universal Technical reported narrower-than-expected loss in the first quarter of fiscal 2017.
The company’s adjusted loss of $0.09 per share in the quarter was narrower than the Zacks Consensus Estimate of a loss of $0.10 by 10%. In the year-ago quarter, the company posted loss per share of $0.03. Quarterly earnings were adjusted for severance costs.
Revenues & Enrollment
Revenues of $84.2 million in the first quarter fell 6.2% from the prior-year quarter due to a 9.8% decrease in student enrollment. Also, the company reported one less earning day in the first quarter of 2017 which impacted comparable revenues by $1.4 million.
The top line, however, excluded revenues of $5 million related to the loan program during the quarter. The company intends to include this amount in the forthcoming quarters as students pay back their debts.
Universal Technical reported a 9.8% drop in average undergraduate full-time enrollments in the quarter. The decline can be attributed to lower student population and weak student starts. Total starts declined 22.2% in the quarter under review.
Universal Technical’s enrollments have been sluggish for several quarters due to regulatory challenges along with changes and competition in the higher education industry.
Operating expenses reduced 10% or by $9.2 million to $82.8 million on lower compensation expenses and improved operating efficiencies following the implementation of the Financial Improvement Plan. The savings were however partially offset by $1.3 million in severance charges related to workforce reduction in Nov 2016.
The company reported operating income of $1.4 million in the quarter as against an operating loss of $2.2 million in the prior-year quarter. The improvement can be attributed to $0.8 million in operating income from the Long Beach campus and significant cost reduction.
Financials
The company has cash and cash equivalents and investments of $103.8 million as of Dec 31, 2016, compared with $120.7 million as of Sep 30, 2016. The decrease is due to $11.5 million of restricted cash related to collateralization of bonds and changes in working capital.
Cash flow used in operating activities was $17.4 million in the first quarter of 2017, compared with $3.5 million in the same quarter last fiscal.
FY17 Guidance
Universal Technical expects new student starts to decline in the high-single digits, compared to the low-single digit range stated earlier.
The average student population is likely to decline low-double digits as a percentage from the fiscal 2016 level. Earlier, the company had expected a decline of mid-to-high single digit.
Revenues are expected to be down in the mid-single digits range in fiscal 2017. Earlier, revenues were anticipated to decline in the low to mid single digits.
Universal Technical now expects its Financial Improvement Plan implemented to deliver greater than $30 million in annualized cost savings in fiscal 2017, whereas the plan was earlier expected to deliver between $25 million and $30 million in annualized cost savings.
Capital expenditures are expected to be approximately $12.5 million to $13.5 million for the year ending Sep 30, 2017, as stated in the previous quarter also.
How Have Estimates Been Moving Since Then?
Analysts were quiet during the last one month period as none of them issued any earnings estimate revisions.
Universal Technical Institute Inc Price and Consensus
At this time, Universal Technical's stock has a subpar Growth score of 'D', however its Momentum is doing a bit better with a 'B'. Charting a somewhat similar path, the stock was allocated a grade of 'F' on the value side, putting it in the fifth quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of 'F'. If you aren't focused on one strategy, this score is the one you should be interested in.
The stock is suitable solely for momentum investors based on our styles scores.
Outlook
The stock has a Zacks Rank #3 (Hold). We are expecting a inline return from the stock in the next few months.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Universal Technical (UTI) Up 2.9% Since Earnings Report: Can It Continue?
It has been about a month since the last earnings report for Universal Technical Institute Inc. (UTI - Free Report) . Shares have added about 2.9% in that time frame, underperforming the market.
Will the recent positive trend continue leading up to the stock’s next earnings release, or is it due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Universal Technical Q1 Loss Narrower than Expected
Universal Technical reported narrower-than-expected loss in the first quarter of fiscal 2017.
The company’s adjusted loss of $0.09 per share in the quarter was narrower than the Zacks Consensus Estimate of a loss of $0.10 by 10%. In the year-ago quarter, the company posted loss per share of $0.03. Quarterly earnings were adjusted for severance costs.
Revenues & Enrollment
Revenues of $84.2 million in the first quarter fell 6.2% from the prior-year quarter due to a 9.8% decrease in student enrollment. Also, the company reported one less earning day in the first quarter of 2017 which impacted comparable revenues by $1.4 million.
The top line, however, excluded revenues of $5 million related to the loan program during the quarter. The company intends to include this amount in the forthcoming quarters as students pay back their debts.
Universal Technical reported a 9.8% drop in average undergraduate full-time enrollments in the quarter. The decline can be attributed to lower student population and weak student starts. Total starts declined 22.2% in the quarter under review.
Universal Technical’s enrollments have been sluggish for several quarters due to regulatory challenges along with changes and competition in the higher education industry.
Operating expenses reduced 10% or by $9.2 million to $82.8 million on lower compensation expenses and improved operating efficiencies following the implementation of the Financial Improvement Plan. The savings were however partially offset by $1.3 million in severance charges related to workforce reduction in Nov 2016.
The company reported operating income of $1.4 million in the quarter as against an operating loss of $2.2 million in the prior-year quarter. The improvement can be attributed to $0.8 million in operating income from the Long Beach campus and significant cost reduction.
Financials
The company has cash and cash equivalents and investments of $103.8 million as of Dec 31, 2016, compared with $120.7 million as of Sep 30, 2016. The decrease is due to $11.5 million of restricted cash related to collateralization of bonds and changes in working capital.
Cash flow used in operating activities was $17.4 million in the first quarter of 2017, compared with $3.5 million in the same quarter last fiscal.
FY17 Guidance
Universal Technical expects new student starts to decline in the high-single digits, compared to the low-single digit range stated earlier.
The average student population is likely to decline low-double digits as a percentage from the fiscal 2016 level. Earlier, the company had expected a decline of mid-to-high single digit.
Revenues are expected to be down in the mid-single digits range in fiscal 2017. Earlier, revenues were anticipated to decline in the low to mid single digits.
Universal Technical now expects its Financial Improvement Plan implemented to deliver greater than $30 million in annualized cost savings in fiscal 2017, whereas the plan was earlier expected to deliver between $25 million and $30 million in annualized cost savings.
Capital expenditures are expected to be approximately $12.5 million to $13.5 million for the year ending Sep 30, 2017, as stated in the previous quarter also.
How Have Estimates Been Moving Since Then?
Analysts were quiet during the last one month period as none of them issued any earnings estimate revisions.
Universal Technical Institute Inc Price and Consensus
Universal Technical Institute Inc Price and Consensus | Universal Technical Institute Inc Quote
VGM Scores
At this time, Universal Technical's stock has a subpar Growth score of 'D', however its Momentum is doing a bit better with a 'B'. Charting a somewhat similar path, the stock was allocated a grade of 'F' on the value side, putting it in the fifth quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of 'F'. If you aren't focused on one strategy, this score is the one you should be interested in.
The stock is suitable solely for momentum investors based on our styles scores.
Outlook
The stock has a Zacks Rank #3 (Hold). We are expecting a inline return from the stock in the next few months.