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Adtalem (ATGE) Q4 Earnings Beat, Revenues Miss Estimates
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Adtalem Global Education Inc. (ATGE - Free Report) reported fourth-quarter fiscal 2017 results, wherein earnings beat the Zacks Consensus Estimate but revenues fell short of expectations.
Fourth-quarter fiscal 2017 adjusted earnings of 78 cents per share surpassed the Zacks Consensus Estimate of 72 cents by 8.3%. On a year-over-year basis, the company’s earnings surged 20%.
Adtalem’s quarterly net sales of $451.5 million missed the Zacks Consensus Estimate of $454 million by 0.6%. Total revenue also declined 4.3% from the year-ago figure of $471.7 million. Solid contribution from Professional Education as well as Technology and Business segments was offset by weak results from U.S. Traditional Postsecondary division.
The company’s total operating cost and expenses decreased 19.8% year over year to $398.1 million in the quarter. Operating income was $53.4 million in the quarter. However, in the year-ago period, the company incurred an operating loss of $24.9 million.
Segment Details
Medical and Healthcare: This reporting segment, which is the largest contributor to revenues and earnings, includes Chamberlain University, American University of the Caribbean School of Medicine, Ross University School of Medicine and Ross University School of Veterinary Medicine.
In the fiscal fourth quarter, segmental revenues of $193.1 million remained flat compared with the year-ago level. Growth at Chamberlain University was offset by lower revenue at the medical and veterinary schools.
Operating income at the segment, barring special items, was $42.9 million, up 12.2% from the prior-year quarter.
At Chamberlain, revenues rose 2.4%. Revenue for the medical and veterinary schools decreased 3%.
In May, new student count of Chamberlain University increased 4%, raising the total student count by 5.7%. In July session, new students count grew 16.5%, while total students increased 6.3%.
Professional Education: The segment includes Becker and Association of Certified Anti Money Laundering Specialists or ACAMS. It also comprises DeVry Education of Brazil.
The segment registered revenues of $39.9 million, up 26.5% year over year, mostly driven by acquisitions of ACAMS.
Adjusted operating income was $11.1 million, down 16.8% year over year.
Technology and Business: This segment, comprising Adtalem Brazil Institution, registered revenues of $82.9 million, increasing 11% year over year, owing to currency benefit.
This segment generated operating income of $19 million, reflecting 29% year-over-year increase.
US Traditional Postsecondary: This reporting segment includes results of DeVry University and Carrington College.
The segment registered revenues of $136.3 million, declining 21.3% year over year because of declining enrollments at DeVry University in Carrington.
This division incurred an operating loss (adjusted for special item) of $898 million against a loss of $1,178 million a year ago.
DeVry University generated revenues of $104 million in the quarter, down 23% due to continued enrollment declines.
In Jul 2017, undergraduate new student enrollments declined 11.4%, while total students fell 22.1%.
Fiscal 2017 Highlights
The company’s earnings came in at $2.79 per share in the fiscal year, increasing 15.8% year over year.
Total revenue of $1,809.8 million declined 1.8% year over year.
Fiscal 2018 Guidance
The company expects earnings per share for fiscal 2018 to grow in the low-single digit range. Total revenue is anticipated to be flat to down 1% for the year.
Capital spending is expected in the range of $65-$70 million for fiscal 2018. The effective income tax rate for the fiscal year is likely to be around 21-22%.
Fiscal First Quarter Guidance
Revenues are expected to be down 4-5% in the quarter, on a year-over-year basis. First quarter operating costs, before special items, are expected to decline 4-5% year over year.
American Public Education, Inc. (APEI - Free Report) reported second-quarter 2017 earnings per share of 23 cents, which came in line with the Zacks Consensus Estimate. Earnings plunged considerably by 43.9% year over year due to declining revenues because of sluggishness in enrollments.
Strayer Education Inc. (STRA - Free Report) reported second-quarter 2017 earnings of 92 cents per share, beating the Zacks Consensus Estimate of 89 cents by 3.4%. Also, earnings surged 28% year over year.
Capella Education Company reported adjusted earnings of 90 cents in the second quarter of 2017, which surpassed the Zacks Consensus Estimate of 80 cents by 12.5%. Adjusted earnings however declined 3.2% year over year.
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Adtalem (ATGE) Q4 Earnings Beat, Revenues Miss Estimates
Adtalem Global Education Inc. (ATGE - Free Report) reported fourth-quarter fiscal 2017 results, wherein earnings beat the Zacks Consensus Estimate but revenues fell short of expectations.
Fourth-quarter fiscal 2017 adjusted earnings of 78 cents per share surpassed the Zacks Consensus Estimate of 72 cents by 8.3%. On a year-over-year basis, the company’s earnings surged 20%.
Adtalem’s quarterly net sales of $451.5 million missed the Zacks Consensus Estimate of $454 million by 0.6%. Total revenue also declined 4.3% from the year-ago figure of $471.7 million. Solid contribution from Professional Education as well as Technology and Business segments was offset by weak results from U.S. Traditional Postsecondary division.
The company’s total operating cost and expenses decreased 19.8% year over year to $398.1 million in the quarter. Operating income was $53.4 million in the quarter. However, in the year-ago period, the company incurred an operating loss of $24.9 million.
Segment Details
Medical and Healthcare: This reporting segment, which is the largest contributor to revenues and earnings, includes Chamberlain University, American University of the Caribbean School of Medicine, Ross University School of Medicine and Ross University School of Veterinary Medicine.
In the fiscal fourth quarter, segmental revenues of $193.1 million remained flat compared with the year-ago level. Growth at Chamberlain University was offset by lower revenue at the medical and veterinary schools.
Operating income at the segment, barring special items, was $42.9 million, up 12.2% from the prior-year quarter.
At Chamberlain, revenues rose 2.4%. Revenue for the medical and veterinary schools decreased 3%.
In May, new student count of Chamberlain University increased 4%, raising the total student count by 5.7%. In July session, new students count grew 16.5%, while total students increased 6.3%.
Professional Education: The segment includes Becker and Association of Certified Anti Money Laundering Specialists or ACAMS. It also comprises DeVry Education of Brazil.
The segment registered revenues of $39.9 million, up 26.5% year over year, mostly driven by acquisitions of ACAMS.
Adjusted operating income was $11.1 million, down 16.8% year over year.
Technology and Business: This segment, comprising Adtalem Brazil Institution, registered revenues of $82.9 million, increasing 11% year over year, owing to currency benefit.
This segment generated operating income of $19 million, reflecting 29% year-over-year increase.
US Traditional Postsecondary: This reporting segment includes results of DeVry University and Carrington College.
The segment registered revenues of $136.3 million, declining 21.3% year over year because of declining enrollments at DeVry University in Carrington.
This division incurred an operating loss (adjusted for special item) of $898 million against a loss of $1,178 million a year ago.
DeVry University generated revenues of $104 million in the quarter, down 23% due to continued enrollment declines.
In Jul 2017, undergraduate new student enrollments declined 11.4%, while total students fell 22.1%.
Fiscal 2017 Highlights
The company’s earnings came in at $2.79 per share in the fiscal year, increasing 15.8% year over year.
Total revenue of $1,809.8 million declined 1.8% year over year.
Fiscal 2018 Guidance
The company expects earnings per share for fiscal 2018 to grow in the low-single digit range. Total revenue is anticipated to be flat to down 1% for the year.
Capital spending is expected in the range of $65-$70 million for fiscal 2018. The effective income tax rate for the fiscal year is likely to be around 21-22%.
Fiscal First Quarter Guidance
Revenues are expected to be down 4-5% in the quarter, on a year-over-year basis. First quarter operating costs, before special items, are expected to decline 4-5% year over year.
Zacks Rank
Adtalem currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Peer Releases
American Public Education, Inc. (APEI - Free Report) reported second-quarter 2017 earnings per share of 23 cents, which came in line with the Zacks Consensus Estimate. Earnings plunged considerably by 43.9% year over year due to declining revenues because of sluggishness in enrollments.
Strayer Education Inc. (STRA - Free Report) reported second-quarter 2017 earnings of 92 cents per share, beating the Zacks Consensus Estimate of 89 cents by 3.4%. Also, earnings surged 28% year over year.
Capella Education Company reported adjusted earnings of 90 cents in the second quarter of 2017, which surpassed the Zacks Consensus Estimate of 80 cents by 12.5%. Adjusted earnings however declined 3.2% year over year.
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Tech stocks have been a major force behind the market’s record highs, but picking the best ones to buy can be tough. There’s a simple way to invest in the success of the entire sector. Zacks has just released a Special Report revealing one thing tech companies literally cannot function without. More importantly, it reveals 4 top stocks set to skyrocket on increasing demand for these devices. I encourage you to get the report now – before the next wave of innovations really take off.
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