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Universal Technical (UTI) Q1 Earnings Miss, Enrollment Down

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Universal Technical Institute, Inc. (UTI - Free Report) reported adjusted loss of 21 cents per share in the first quarter of fiscal 2018, wider than the Zacks Consensus Estimate of a loss of 9 cents. The reported loss was also wider than the year-ago loss of 9 cents.

Revenues & Enrollment

Revenues of $81.2 million in the first quarter decreased 3.6% from $84.2 million in the prior-year quarter. The decline was caused by a 5.8% drop in average student enrollment.

Total starts fell 7.1% year over year during the quarter.

Operating Highlights

The company reported operating loss of $3.6 million compared with an operating loss of $1.4 million in the prior-year quarter. The downside was primarily a result of reduced revenues and increased in advertising, contract services and professional services expenses, partially offset by lower compensation expenses.

Operating expenses rose 2.4% to $84.8 million.

Earnings before interest, taxes, depreciation and amortization (EBITDA) were $0.8 million compared with $6.3 million in the prior-year quarter.

Financials

The company had cash and cash equivalents, and investments of $86.5 million as of Dec 31, 2017, compared with $50.1 million as of Sep 30, 2017.

Fiscal 2018 Guidance Reaffirmed

Universal Technical expects new student starts growth in low-single digits. The average student population is likely to decline mid-single digits.

Revenues are expected in the $310-$320 million range for the year.

Operating expenses is projected in the range of $340 million to $345 million, reflecting an increase of $14-$19 million from fiscal 2017.

Universal Technical expects to incur operating loss between $20 million and $25 million and negative EBITDA.

Capital expenditures are expected between $24 million and $25 million for the year ending Sep 30, 2018. This includes approximately $11 million from New Jersey campus that is expected to open in the fall of 2018; and approximately $4 million to expand welding program to two additional campuses, $7 million for new and replacement equipment for existing campuses; and approximately $2.5 million for real estate consolidation.

Universal Technical Institute Inc Price, Consensus and EPS Surprise

Zacks Rank & Upcoming Peer Releases

Universal Technical carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

American Public Education (APEI - Free Report) is scheduled to report fourth-quarter 2017 results on Feb 27. The Zacks Consensus Estimate for earnings is pegged at 33 cents, down 21.4% year over year.

Strayer Education (STRA - Free Report) is expected to report fourth-quarter 2017 results on Feb 15. The Zacks Consensus Estimate for earnings is pegged at $1.28, up 34.7% year over year.

Capella Education is slated to report fourth-quarter 2017 results on Feb 13. The Zacks Consensus Estimate for earnings is pegged at $1.03, up 6.2% year over year.

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