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DeVry Education (DV) Tops Q1 Earnings and Sales Estimates
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DeVry Education Group Inc. (DV - Free Report) reported robust first-quarter fiscal 2017 results, surpassing the Zacks Consensus Estimate for both sales and earnings for the third quarter in a row. DeVry’s earnings were driven by Medical and Healthcare, Professional Education and International Institutions.
First-quarter fiscal 2017 adjusted earnings of 45 cents per share surpassed the Zacks Consensus Estimate of 41 cents by 9.8%. Earnings also increased 18.4% year over year.
DeVry’s quarterly net sales of $450 million surpassed the Zacks Consensus Estimate of $447 million by 0.7%. Total revenue increased 1.9% on a year-over-year basis.
Business, Technology and Management: This segment includes operations of the company’s largest subsidiary, DeVry University, which offers both graduate and undergraduate courses.
The segment recorded revenues of $120.9 million, down 24.2% year over year owing to continued enrollment declines in the July and September sessions at DeVry University.
The segment recorded an operating loss of $6.3 million in the quarter. DeVry University achieved $33.8 million of cost savings in the first quarter and expects additional cost reduction in fiscal 2017.
In September, undergraduate new student enrollments declined 14.3% and total students fell 22.9%, representing narrower decline compared to July. During the fiscal first quarter, DeVry University started launching a range of technology-focused, stackable programs focused on fostering in-demand skills, beginning with certificates in website design and website development.
It also reached an agreement with the U.S. Department of Education regarding its Jan 27, 2016 Notice of Intent to Limit.
Medical and Healthcare: Medical and Healthcare is the company’s largest segment at present. It consists of DeVry Medical International, Chamberlain College of Nursing and Carrington College.
For the first quarter, segmental revenues of $236.8 million grew 5.7% from the prior year quarter, led by solid growth at Chamberlain College of Nursing. Operating income for the segment, excluding special items, was $43.2 million, representing an increase of 24.8 % from the prior year quarter.
Revenues in the first quarter at DeVry Medical International grew 6.6% to $88.3 million. In September, new student enrollment decreased 18.7% and total students dropped 5.8% at DeVry Medical International.
Revenues at Carrington College decreased 7.9 % in the first quarter to $37.0 million.At Carrington College, new students declined 9.5% and total student count deteriorated by 12.2%.
At the Chamberlain College of Nursing, revenues escalated 10.4% to $111.5 million due to Chamberlain’s delivery record new student starts, including the largest RN-BSN class in its history. In addition, both the MSN and DNP programs recorded their second highest starts in history.
In September, new students increased 1.2% as the company. Total student count grew nearly 12%.
International and Professional Education: The segment includes professional exam review and training operations of Becker Professional Review and DeVry Brasil.
The segment recorded revenues of $93 million, up 58.5% year over year, mostly driven by acquisitions and year-over-year growth in total enrollment.
Adjusted operating income was $4.1 million.
DeVry Brasil’s revenues increased 75.1% to $58.2 million year over year, primarily driven by the acquisition of Ibmec as well as organic enrollment growth.
Professional Education revenues increased 36.6% during the quarter, driven by the acquisition of ACAMS, which more than offset declines in Becker CPA and Healthcare.
DeVry Group Outlook
Second-quarter fiscal 2017 revenue is expected to be flat to up 1% from the prior year quarter. Operating costs before special items are expected to decrease 1–2 % versus the prior year quarter.
For full-year 2017, revenues are expected to be flat compared to the prior year quarter and earnings (before special items) are likely to grow in the mid-single digits as compared to the prior year quarter.
Full-year capital spending is expected in the $70–$75 million range. The effective income tax rate for the fiscal is likely to be approximately 22–23%, before special items.
DeVry Education currently carries a Zacks Rank #4 (Sell).
Meanwhile, two companies in the school industry which have already reported third-quarter numbers are Capella Education Company and Strayer Education Inc. (STRA - Free Report) . Both Capella Education and Strayer Education surpassed earnings estimates in the third quarter.
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DeVry Education (DV) Tops Q1 Earnings and Sales Estimates
DeVry Education Group Inc. (DV - Free Report) reported robust first-quarter fiscal 2017 results, surpassing the Zacks Consensus Estimate for both sales and earnings for the third quarter in a row. DeVry’s earnings were driven by Medical and Healthcare, Professional Education and International Institutions.
First-quarter fiscal 2017 adjusted earnings of 45 cents per share surpassed the Zacks Consensus Estimate of 41 cents by 9.8%. Earnings also increased 18.4% year over year.
DeVry’s quarterly net sales of $450 million surpassed the Zacks Consensus Estimate of $447 million by 0.7%. Total revenue increased 1.9% on a year-over-year basis.
DEVRY EDUCATION Price, Consensus and EPS Surprise
DEVRY EDUCATION Price, Consensus and EPS Surprise | DEVRY EDUCATION Quote
Segment Details
Business, Technology and Management: This segment includes operations of the company’s largest subsidiary, DeVry University, which offers both graduate and undergraduate courses.
The segment recorded revenues of $120.9 million, down 24.2% year over year owing to continued enrollment declines in the July and September sessions at DeVry University.
The segment recorded an operating loss of $6.3 million in the quarter. DeVry University achieved $33.8 million of cost savings in the first quarter and expects additional cost reduction in fiscal 2017.
In September, undergraduate new student enrollments declined 14.3% and total students fell 22.9%, representing narrower decline compared to July.
During the fiscal first quarter, DeVry University started launching a range of technology-focused, stackable programs focused on fostering in-demand skills, beginning with certificates in website design and website development.
It also reached an agreement with the U.S. Department of Education regarding its Jan 27, 2016 Notice of Intent to Limit.
Medical and Healthcare: Medical and Healthcare is the company’s largest segment at present. It consists of DeVry Medical International, Chamberlain College of Nursing and Carrington College.
For the first quarter, segmental revenues of $236.8 million grew 5.7% from the prior year quarter, led by solid growth at Chamberlain College of Nursing. Operating income for the segment, excluding special items, was $43.2 million, representing an increase of 24.8 % from the prior year quarter.
Revenues in the first quarter at DeVry Medical International grew 6.6% to $88.3 million. In September, new student enrollment decreased 18.7% and total students dropped 5.8% at DeVry Medical International.
Revenues at Carrington College decreased 7.9 % in the first quarter to $37.0 million.At Carrington College, new students declined 9.5% and total student count deteriorated by 12.2%.
At the Chamberlain College of Nursing, revenues escalated 10.4% to $111.5 million due to Chamberlain’s delivery record new student starts, including the largest RN-BSN class in its history. In addition, both the MSN and DNP programs recorded their second highest starts in history.
In September, new students increased 1.2% as the company. Total student count grew nearly 12%.
International and Professional Education: The segment includes professional exam review and training operations of Becker Professional Review and DeVry Brasil.
The segment recorded revenues of $93 million, up 58.5% year over year, mostly driven by acquisitions and year-over-year growth in total enrollment.
Adjusted operating income was $4.1 million.
DeVry Brasil’s revenues increased 75.1% to $58.2 million year over year, primarily driven by the acquisition of Ibmec as well as organic enrollment growth.
Professional Education revenues increased 36.6% during the quarter, driven by the acquisition of ACAMS, which more than offset declines in Becker CPA and Healthcare.
DeVry Group Outlook
Second-quarter fiscal 2017 revenue is expected to be flat to up 1% from the prior year quarter. Operating costs before special items are expected to decrease 1–2 % versus the prior year quarter.
For full-year 2017, revenues are expected to be flat compared to the prior year quarter and earnings (before special items) are likely to grow in the mid-single digits as compared to the prior year quarter.
Full-year capital spending is expected in the $70–$75 million range. The effective income tax rate for the fiscal is likely to be approximately 22–23%, before special items.
DeVry Education currently carries a Zacks Rank #4 (Sell).
Meanwhile, two companies in the school industry which have already reported third-quarter numbers are Capella Education Company and Strayer Education Inc. (STRA - Free Report) . Both Capella Education and Strayer Education surpassed earnings estimates in the third quarter.
Upcoming Peer Release
Universal Technical Institute, Inc. (UTI - Free Report) is slated to release its earnings on Dec 6. It is expected to witness a 222.2% decline in the upcoming earnings. The company carries a Zacks Rank #3 (Hold). You can seethe complete list of today’s Zacks #1 Rank (Strong Buy) stocks here
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