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Capella Education (CPLA) Tops Q1 Earnings, Enrollments Up
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Capella Education Company reported adjusted earnings of 94 cents in the first quarter of 2017, which surpassed the Zacks Consensus Estimate of 87 cents by 8.1%. Adjusted earnings per share decreased 9.3% year over year.
Revenues and Enrollment
Capella’s quarterly revenues of $111.8 million beat the Zacks Consensus Estimate of $111.0 million by a nominal margin. Revenues also inched up 6% from the year-ago level owing to higher enrollments. Revenues were at the high end of the projected range of 5% to 6%.
Capella reports under two segments: Post-Secondary and Job-Ready Skills. While the Post-Secondary segment comprises Capella University and Sophia Learning, the Job-Ready Skills segment consists of Capella Learning Solutions, Hackbright Academy and DevMountain.
Post-Secondary: The segment reported revenues of $109.5 million, up 3.8% year over year, driven by positive enrollment levels at Capella University. Operating margin of 18.5% increased 170 basis points (bps) year over year.
Capella University’s total active enrollment increased 8% to 38,802 learners, while new enrollment increased 3.6% on a year-over-year basis. Early cohort persistence improved 5% year over year but was flat sequentially.
Job-Ready Skills: The segment reported revenues of $2.3 million in the quarter, compared with $0.02 million in the prior-year quarter. The segment reported an operating loss of $2.7 million, wider than the loss of $1.2 million reported in the prior-year quarter.
Margins
Capella’s operating income from continuing operations was $17.6 million, up 6.7% from the year-ago figure. Operating margin of 15.7% was flat with the prior-year quarter level.
Capella Education Company Price, Consensus and EPS Surprise
Capella generated $16.2 million in operating cash flow from continuing operations, compared with $22.7 million in the prior-year quarter.
Capella ended the quarter with cash and cash equivalents of $99.1 million, compared with $93.6 million at 2016-end.
Capital expenditures in the quarter totaled $5.8 million.
Second-Quarter 2017 Guidance
Consolidated revenues are expected to rise 2.5% to 3.5% from first-quarter 2016 levels. Capella University’s new enrollments are likely to decline in the low-single digit range while total enrollment is anticipated to decrease 1% year over year.
Consolidated operating margin from continuing operations is projected at about 13.5% to 14.5% of total revenue for the quarter.
2017 Guidance
Consolidated revenues are expected to rise 3% to 5%.
Operating margins are likely to be similar to the fiscal 2016 level of 15.9%.
Strayer Education Inc. (STRA - Free Report) is slated to release its quarterly numbers on May 3. The Zacks Consensus Estimate for earnings is pegged at 94 cents.
Grand Canyon Education, Inc. (LOPE - Free Report) is scheduled to release its quarterly numbers on May 4. The Zacks Consensus Estimate for earnings is pegged at $1.01.
American Public Education, Inc. (APEI - Free Report) is scheduled to report first-quarter results on May 9. The Zacks Consensus Estimate for earnings is pegged at 29 cents.
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Capella Education (CPLA) Tops Q1 Earnings, Enrollments Up
Capella Education Company reported adjusted earnings of 94 cents in the first quarter of 2017, which surpassed the Zacks Consensus Estimate of 87 cents by 8.1%. Adjusted earnings per share decreased 9.3% year over year.
Revenues and Enrollment
Capella’s quarterly revenues of $111.8 million beat the Zacks Consensus Estimate of $111.0 million by a nominal margin. Revenues also inched up 6% from the year-ago level owing to higher enrollments. Revenues were at the high end of the projected range of 5% to 6%.
Capella reports under two segments: Post-Secondary and Job-Ready Skills. While the Post-Secondary segment comprises Capella University and Sophia Learning, the Job-Ready Skills segment consists of Capella Learning Solutions, Hackbright Academy and DevMountain.
Post-Secondary: The segment reported revenues of $109.5 million, up 3.8% year over year, driven by positive enrollment levels at Capella University. Operating margin of 18.5% increased 170 basis points (bps) year over year.
Capella University’s total active enrollment increased 8% to 38,802 learners, while new enrollment increased 3.6% on a year-over-year basis. Early cohort persistence improved 5% year over year but was flat sequentially.
Job-Ready Skills: The segment reported revenues of $2.3 million in the quarter, compared with $0.02 million in the prior-year quarter. The segment reported an operating loss of $2.7 million, wider than the loss of $1.2 million reported in the prior-year quarter.
Margins
Capella’s operating income from continuing operations was $17.6 million, up 6.7% from the year-ago figure. Operating margin of 15.7% was flat with the prior-year quarter level.
Capella Education Company Price, Consensus and EPS Surprise
Capella Education Company Price, Consensus and EPS Surprise | Capella Education Company Quote
Financials
Capella generated $16.2 million in operating cash flow from continuing operations, compared with $22.7 million in the prior-year quarter.
Capella ended the quarter with cash and cash equivalents of $99.1 million, compared with $93.6 million at 2016-end.
Capital expenditures in the quarter totaled $5.8 million.
Second-Quarter 2017 Guidance
Consolidated revenues are expected to rise 2.5% to 3.5% from first-quarter 2016 levels. Capella University’s new enrollments are likely to decline in the low-single digit range while total enrollment is anticipated to decrease 1% year over year.
Consolidated operating margin from continuing operations is projected at about 13.5% to 14.5% of total revenue for the quarter.
2017 Guidance
Consolidated revenues are expected to rise 3% to 5%.
Operating margins are likely to be similar to the fiscal 2016 level of 15.9%.
Zacks Rank & Upcoming Peer Releases
Capella currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Strayer Education Inc. (STRA - Free Report) is slated to release its quarterly numbers on May 3. The Zacks Consensus Estimate for earnings is pegged at 94 cents.
Grand Canyon Education, Inc. (LOPE - Free Report) is scheduled to release its quarterly numbers on May 4. The Zacks Consensus Estimate for earnings is pegged at $1.01.
American Public Education, Inc. (APEI - Free Report) is scheduled to report first-quarter results on May 9. The Zacks Consensus Estimate for earnings is pegged at 29 cents.
Looking for Ideas with Even Greater Upside?
Today's investment ideas are short-term, directly based on our proven 1 to 3 month indicator. In addition, I invite you to consider our long-term opportunities. These rare trades look to start fast with strong Zacks Ranks, but carry through with double and triple-digit profit potential. Starting now, you can look inside our home run, value, and stocks under $10 portfolios, plus more.
Click here for a peek at this private information >>