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Universal Technical (UTI) Posts Wider-Than-Expected Q2 Loss
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Universal Technical Institute, Inc. (UTI - Free Report) reported second-quarter fiscal 2019 results, wherein a loss of 27 cents per share was wider than the Zacks Consensus Estimate of a loss of 17 cents. However, the reported loss was narrower than the year-ago loss of 40 cents.
The company’s quarterly revenues of $81.7 million marginally surpassed the consensus mark of $81.6 million. Moreover, the reported revenues increased 1.3% from the prior-year figure of $80.7 million, attributable to higher average full-time enrollment despite one less earning day. Total starts also improved 11.2% year over year to 2,022 students during the quarter.
Universal Technical Institute Inc Price, Consensus and EPS Surprise
Operating expenses declined 2.4% from the year-ago figure to $87.3 million, backed by lower compensation and related costs, along with reduced contract and professional services expense. The reduction was partially offset by one-time cost of $1.25 million associated with the divesture of its Norwood, MA campus and direct costs of $1.3 million related to the Bloomfield, NJ campus.
Adjusted operating loss came in at $4.2 million, narrower than a loss of $6.7 million recorded in the prior-year period. Notably, adjusted EBITDA totaled $0.8 million during the reported quarter, whereas adjusted EBITDA was a loss of $2.3 million in the year-ago period.
Financial Highlights
As of Mar 31, 2019, the company had cash and cash equivalents of $52.9 million compared with $58.1 million recorded at 2018-end.
Net cash provided by operations totaled $2.8 million in the first six months of fiscal 2019 versus net cash used in operations of $6.1 million in the comparable period of fiscal 2018. Adjusted free cash flow of $3 million improved significantly from the prior-year quarter.
Fiscal 2019 Guidance Reaffirmed
Universal Technical expects new student starts growth in mid-high single digits across existing campuses, including the new Bloomfield, NJ campus. The average student population is likely to rise in low-single digits.
Fiscal 2019 revenues are expected in the range of $322-$332 million. Operating expenses are projected in the range of $337-$347 million.
Universal Technical expects to incur operating loss between $10 million and $15 million. Moreover, adjusted operating loss is anticipated in the range of $6-$11 million.
Adjusted EBITDA is anticipated in the range of $9-$15 million. Capital expenditure for fiscal 2019 is likely to be between $6 million and $8 million.
Importantly, UTI expects the divesture of Norwood campus to improve annual pre-tax net income, EBITDA and cash flows going forward.
Zacks Rank & Key Picks
Currently, Universal Technical carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the Zacks Schools industry are Strategic Education, Inc. (STRA - Free Report) , Bright Horizons Family Solutions Inc. (BFAM - Free Report) and Career Education Corporation (CECO - Free Report) . While Strategic Education sports a Zacks Rank #1 (Strong Buy), both Bright Horizons and Career Education carry a Zacks Rank #2 (Buy). You can the complete list of today’s Zacks #1 Rank stocks here.
Strategic Education is expected to record an EPS growth rate of 36.2% in the current year.
Bright Horizons has an expected earnings growth rate of 12.8% for 2019.
Career Education’s earnings per share are expected to increase 9.5% in fiscal 2018.
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A select few stocks could skyrocket the most as rollout accelerates for this new tech. Early investors could see gains similar to buying Microsoft in the 1990s. Zacks’ just-released special report reveals 7 stocks to watch. The report is only available for a limited time.
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Universal Technical (UTI) Posts Wider-Than-Expected Q2 Loss
Universal Technical Institute, Inc. (UTI - Free Report) reported second-quarter fiscal 2019 results, wherein a loss of 27 cents per share was wider than the Zacks Consensus Estimate of a loss of 17 cents. However, the reported loss was narrower than the year-ago loss of 40 cents.
The company’s quarterly revenues of $81.7 million marginally surpassed the consensus mark of $81.6 million. Moreover, the reported revenues increased 1.3% from the prior-year figure of $80.7 million, attributable to higher average full-time enrollment despite one less earning day. Total starts also improved 11.2% year over year to 2,022 students during the quarter.
Universal Technical Institute Inc Price, Consensus and EPS Surprise
Universal Technical Institute Inc price-consensus-eps-surprise-chart | Universal Technical Institute Inc Quote
Operating Highlights
Operating expenses declined 2.4% from the year-ago figure to $87.3 million, backed by lower compensation and related costs, along with reduced contract and professional services expense. The reduction was partially offset by one-time cost of $1.25 million associated with the divesture of its Norwood, MA campus and direct costs of $1.3 million related to the Bloomfield, NJ campus.
Adjusted operating loss came in at $4.2 million, narrower than a loss of $6.7 million recorded in the prior-year period. Notably, adjusted EBITDA totaled $0.8 million during the reported quarter, whereas adjusted EBITDA was a loss of $2.3 million in the year-ago period.
Financial Highlights
As of Mar 31, 2019, the company had cash and cash equivalents of $52.9 million compared with $58.1 million recorded at 2018-end.
Net cash provided by operations totaled $2.8 million in the first six months of fiscal 2019 versus net cash used in operations of $6.1 million in the comparable period of fiscal 2018. Adjusted free cash flow of $3 million improved significantly from the prior-year quarter.
Fiscal 2019 Guidance Reaffirmed
Universal Technical expects new student starts growth in mid-high single digits across existing campuses, including the new Bloomfield, NJ campus. The average student population is likely to rise in low-single digits.
Fiscal 2019 revenues are expected in the range of $322-$332 million. Operating expenses are projected in the range of $337-$347 million.
Universal Technical expects to incur operating loss between $10 million and $15 million. Moreover, adjusted operating loss is anticipated in the range of $6-$11 million.
Adjusted EBITDA is anticipated in the range of $9-$15 million. Capital expenditure for fiscal 2019 is likely to be between $6 million and $8 million.
Importantly, UTI expects the divesture of Norwood campus to improve annual pre-tax net income, EBITDA and cash flows going forward.
Zacks Rank & Key Picks
Currently, Universal Technical carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the Zacks Schools industry are Strategic Education, Inc. (STRA - Free Report) , Bright Horizons Family Solutions Inc. (BFAM - Free Report) and Career Education Corporation (CECO - Free Report) . While Strategic Education sports a Zacks Rank #1 (Strong Buy), both Bright Horizons and Career Education carry a Zacks Rank #2 (Buy). You can the complete list of today’s Zacks #1 Rank stocks here.
Strategic Education is expected to record an EPS growth rate of 36.2% in the current year.
Bright Horizons has an expected earnings growth rate of 12.8% for 2019.
Career Education’s earnings per share are expected to increase 9.5% in fiscal 2018.
Biggest Tech Breakthrough in a Generation
Be among the early investors in the new type of device that experts say could impact society as much as the discovery of electricity. Current technology will soon be outdated and replaced by these new devices. In the process, it’s expected to create 22 million jobs and generate $12.3 trillion in activity.
A select few stocks could skyrocket the most as rollout accelerates for this new tech. Early investors could see gains similar to buying Microsoft in the 1990s. Zacks’ just-released special report reveals 7 stocks to watch. The report is only available for a limited time.
See 7 breakthrough stocks now>>