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Adtalem (ATGE) Q3 Earnings & Revenues Top Estimates, Stock Up
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Adtalem Global Education Inc. (ATGE - Free Report) reported impressive results for third-quarter fiscal 2023. Earnings and revenues surpassed their respective Zacks Consensus Estimate and increased year over year, given the continued benefit from initiatives and cost synergies.
Share of this leading education provider moved up 1.61% in the after-hour trading session on May 2.
In this connection, Steve Beard, president and CEO of Adtalem, said, “We continue to make steady progress in strengthening our operational excellence, supporting our portfolio of programs and solutions in ways that benefit all our stakeholders, especially our students. One testament to these benefits are the first time residency attainment rates for American University of the Caribbean School of Medicine and Ross University School of Medicine students attaining 2023/24 residency positions which, at 97%, are among the highest-ever for these institutions.”
Earnings & Revenues Discussion
Adjusted earnings of $1.13 per share topped the consensus mark of 92 cents by 22.8% and surged 34.5% from 84 cents in the year-ago quarter.
Adtalem Global Education Inc. Price, Consensus and EPS Surprise
Revenues of $369.1 million beat the consensus mark of $355 million by 3.9% and increased 1.3% year over year, driven by strong enrollment at Chamberlain and Medical and Veterinary units. For the fiscal third quarter, enrollment of total students fell 3.1% year over year to 79,586 but improved sequentially.
Adjusted operating income dropped 4.3% from the prior-year quarter’s levels to $73 million. Adjusted operating margin declined 110 basis points to 19.8%. Adjusted EBITDA was $85.9 million, down 6.8% from the prior-year quarter’s levels. Adjusted EBITDA margin contracted 200 bps to 23.3% year over year.
Segment Details
Chamberlain: Revenues in the segment were up 5% from the year-ago quarter’s levels, totaling $149.7 million. Total student enrollment increased 2% to 34,847 students, driven by growth in pre-licensure and post-licensure nursing programs and higher persistence across the segment.
Adjusted operating income inched up 1.7% from the prior-year quarter’s levels to $39.6 million. Adjusted operating margin, however, contracted 90 basis points to 26.4%. Adjusted EBITDA was $44.9 million, down 1.3% from the prior-year quarter’s levels. Adjusted EBITDA margins also fell 190 basis points (bps) to 30%.
Walden: The segment generated revenues of $132.9 million, declined 4.5% year over year. Total student enrollment in the quarter declined 7.9% year over year to 39,427 students. This was due to declines in non-healthcare programs and to a lesser extent to healthcare programs partially offset by higher persistence across the segment.
Adjusted operating income came in at $24.6 million, down 4.7% from a year ago. Adjusted operating margin contracted 10 basis points to 18.5%. Adjusted EBITDA was $27.8 million, down 4.9% from the prior-year period’s levels. Adjusted EBITDA margins declined 10 bps to 20.9%.
Medical and Veterinary: Revenues in the segment increased 4.6% to $86.5 million from the year-ago quarter’s figure. Total student enrollment rose 1.6% from the prior-year quarter’s levels to 5,312 students, backed by growth in medical and veterinary programs.
Adjusted operating income declined 6.9% from the prior-year quarter’s figure to $16.9 million. Adjusted operating margin contracted 240 basis points to 19.5%. Adjusted EBITDA was $20.7 million, down 8.4% from the prior-year quarter’s levels. Adjusted EBITDA margins fell 260 bps to 24%.
Liquidity & Cash Flow
As of Mar 31, 2023, Adtalem had cash and cash equivalents of $315.4 million compared with $347 million at the end of fiscal 2022. Long-term debt was $694.4 million, down from $838.9 million at the end of fiscal 2022. Trailing 12-months net debt to adjusted EBITDA was 1.1x at March end.
For the first nine months of fiscal 2023, cash provided by operating activities (continuing operations) totaled $149.4 million compared with $51.9 million in the year-ago period. Free cash flow in the quarter was $98.2 million compared with $70.3 million a year ago.
In the reported quarter, ATGE repurchased $48 million shares.
Fiscal 2023 Guidance Narrowed
Adtalem expects revenues within $1,400-$1,450 million from $1,380-$1,450 million expected earlier. Also, it has raised the low range of the previously-guided adjusted earnings per share (EPS) of $3.95-$4.20 to $4.05.
Strategic Education, Inc. or SEI (STRA - Free Report) reported mixed first-quarter 2023 results. Quarterly earnings surpassed the Zacks Consensus Estimate but revenues missed the same.
STRA’s top and the bottom line declined year over year. The downside was caused by lower contributions from the ANZ segment.
Leggett & Platt, Inc. (LEG - Free Report) reported impressive first-quarter 2023 results. Earnings and net sales surpassed the Zacks Consensus Estimate. The top and the bottom line came ahead of the company’s expectations also.
However, the metrics declined on a year-over-year basis. The downtrend in LEG’s quarterly result was caused by weak demand in residential end markets, dynamic macroeconomic and geopolitical environment pressure.
Mohawk Industries, Inc. (MHK - Free Report) reported impressive results in first-quarter 2023, with the top and the bottom line surpassing the Zacks Consensus Estimate. However, earnings and net sales declined on a year-over-year basis.
Nonetheless, MHK exceeded its estimates for adjusted earnings of $1.24-$1.34 per share.
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Adtalem (ATGE) Q3 Earnings & Revenues Top Estimates, Stock Up
Adtalem Global Education Inc. (ATGE - Free Report) reported impressive results for third-quarter fiscal 2023. Earnings and revenues surpassed their respective Zacks Consensus Estimate and increased year over year, given the continued benefit from initiatives and cost synergies.
Share of this leading education provider moved up 1.61% in the after-hour trading session on May 2.
In this connection, Steve Beard, president and CEO of Adtalem, said, “We continue to make steady progress in strengthening our operational excellence, supporting our portfolio of programs and solutions in ways that benefit all our stakeholders, especially our students. One testament to these benefits are the first time residency attainment rates for American University of the Caribbean School of Medicine and Ross University School of Medicine students attaining 2023/24 residency positions which, at 97%, are among the highest-ever for these institutions.”
Earnings & Revenues Discussion
Adjusted earnings of $1.13 per share topped the consensus mark of 92 cents by 22.8% and surged 34.5% from 84 cents in the year-ago quarter.
Adtalem Global Education Inc. Price, Consensus and EPS Surprise
Adtalem Global Education Inc. price-consensus-eps-surprise-chart | Adtalem Global Education Inc. Quote
Revenues of $369.1 million beat the consensus mark of $355 million by 3.9% and increased 1.3% year over year, driven by strong enrollment at Chamberlain and Medical and Veterinary units. For the fiscal third quarter, enrollment of total students fell 3.1% year over year to 79,586 but improved sequentially.
Adjusted operating income dropped 4.3% from the prior-year quarter’s levels to $73 million. Adjusted operating margin declined 110 basis points to 19.8%. Adjusted EBITDA was $85.9 million, down 6.8% from the prior-year quarter’s levels. Adjusted EBITDA margin contracted 200 bps to 23.3% year over year.
Segment Details
Chamberlain: Revenues in the segment were up 5% from the year-ago quarter’s levels, totaling $149.7 million. Total student enrollment increased 2% to 34,847 students, driven by growth in pre-licensure and post-licensure nursing programs and higher persistence across the segment.
Adjusted operating income inched up 1.7% from the prior-year quarter’s levels to $39.6 million. Adjusted operating margin, however, contracted 90 basis points to 26.4%. Adjusted EBITDA was $44.9 million, down 1.3% from the prior-year quarter’s levels. Adjusted EBITDA margins also fell 190 basis points (bps) to 30%.
Walden: The segment generated revenues of $132.9 million, declined 4.5% year over year. Total student enrollment in the quarter declined 7.9% year over year to 39,427 students. This was due to declines in non-healthcare programs and to a lesser extent to healthcare programs partially offset by higher persistence across the segment.
Adjusted operating income came in at $24.6 million, down 4.7% from a year ago. Adjusted operating margin contracted 10 basis points to 18.5%. Adjusted EBITDA was $27.8 million, down 4.9% from the prior-year period’s levels. Adjusted EBITDA margins declined 10 bps to 20.9%.
Medical and Veterinary: Revenues in the segment increased 4.6% to $86.5 million from the year-ago quarter’s figure. Total student enrollment rose 1.6% from the prior-year quarter’s levels to 5,312 students, backed by growth in medical and veterinary programs.
Adjusted operating income declined 6.9% from the prior-year quarter’s figure to $16.9 million. Adjusted operating margin contracted 240 basis points to 19.5%. Adjusted EBITDA was $20.7 million, down 8.4% from the prior-year quarter’s levels. Adjusted EBITDA margins fell 260 bps to 24%.
Liquidity & Cash Flow
As of Mar 31, 2023, Adtalem had cash and cash equivalents of $315.4 million compared with $347 million at the end of fiscal 2022. Long-term debt was $694.4 million, down from $838.9 million at the end of fiscal 2022. Trailing 12-months net debt to adjusted EBITDA was 1.1x at March end.
For the first nine months of fiscal 2023, cash provided by operating activities (continuing operations) totaled $149.4 million compared with $51.9 million in the year-ago period. Free cash flow in the quarter was $98.2 million compared with $70.3 million a year ago.
In the reported quarter, ATGE repurchased $48 million shares.
Fiscal 2023 Guidance Narrowed
Adtalem expects revenues within $1,400-$1,450 million from $1,380-$1,450 million expected earlier. Also, it has raised the low range of the previously-guided adjusted earnings per share (EPS) of $3.95-$4.20 to $4.05.
Zacks Rank & Recent Consumer Discretionary Releases
Adtalem currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Strategic Education, Inc. or SEI (STRA - Free Report) reported mixed first-quarter 2023 results. Quarterly earnings surpassed the Zacks Consensus Estimate but revenues missed the same.
STRA’s top and the bottom line declined year over year. The downside was caused by lower contributions from the ANZ segment.
Leggett & Platt, Inc. (LEG - Free Report) reported impressive first-quarter 2023 results. Earnings and net sales surpassed the Zacks Consensus Estimate. The top and the bottom line came ahead of the company’s expectations also.
However, the metrics declined on a year-over-year basis. The downtrend in LEG’s quarterly result was caused by weak demand in residential end markets, dynamic macroeconomic and geopolitical environment pressure.
Mohawk Industries, Inc. (MHK - Free Report) reported impressive results in first-quarter 2023, with the top and the bottom line surpassing the Zacks Consensus Estimate. However, earnings and net sales declined on a year-over-year basis.
Nonetheless, MHK exceeded its estimates for adjusted earnings of $1.24-$1.34 per share.