Universal Technical Institute, Inc. (UTI - Free Report) recently reported fiscal fourth-quarter 2018 results, wherein loss of 49 cents per share was in line with the Zacks Consensus Estimate. However, quarterly revenues of $80.3 million missed the consensus mark of $81.3 million by 1.3%.
Loss incurred during the fiscal fourth quarter was wider than the year-ago level of 8 cents. Also, revenues declined 1.3% from the prior-year quarter, attributable to a 2.1% reduction in average student population.
Universal Technical Institute Inc Price, Consensus and EPS Surprise
Nevertheless, total starts rose 8.5% year over year to 6,022 during the quarter. This year-over-year growth was recorded for the first time in eight years.
Operating expenses of $91.3 million grew 10.8% from a year ago due to a rise in compensation and related costs, along with advertising, contract services and student expenses. Operating loss in the quarter was $11.1 million compared with $1.1 million in the prior-year quarter.
Earnings (loss) before interest, taxes, depreciation and amortization (EBITDA) were $(6.4) million compared with $3.9 million in the year-ago period.
The company had cash and cash equivalents of $58.1 million as of Sep 30, 2018 compared with $50.1 million on Sep 30, 2017.
Net cash used in operations came in at $13.5 million in 2018 compared with $10 million recorded a year ago.
Fiscal 2018 Highlights
Universal Technical incurred fiscal 2018 loss of $1.51 per share, which was in line with the Zacks Consensus Estimate. However, revenues of $317 million missed the consensus mark of $318.1 million by 0.3%.
Revenues in fiscal 2018 decreased 2.3% year over year due to a 4.3% decline in average student population. Loss widened to $1.51 per share from 54 cents in fiscal 2017. Total starts slightly increased to 10,705 from the prior-year level of 10,573.
The company’s operating expenses in fiscal 2018 came in at $352.2 million, up 8% from a year ago. Operating loss was $32.7 million compared with $8.1 million in fiscal 2017.
EBITDA in the fiscal year was $(16.7) million compared with $17.9 million a year ago.
Fiscal 2019 Outlook
Universal Technical expects mid-high single digit new student starts growth across its 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 and $15 million, due to investments in marketing and admissions to support start growth along with the expansion of its welding program. EBITDA is anticipated in the range of $5-$11 million.
Capital expenditure for fiscal 2019 is likely to be between $8 million and $10 million.
Share Price Performance
Universal Technical has outperformed its industry so far this year. The stock has gained around 16.7% against its industry’s collective decline of 14.2% in the said period.
Zacks Rank & Key Picks
Universal Technical currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks from the same industry are K12 Inc. (LRN - Free Report) , RYB Education, Inc. (RYB - Free Report) and Adtalem Global Education Inc. (ATGE - Free Report) . While K12 and RYB Education sport a Zacks Rank #1 (Strong Buy), Adtalem carries a Zacks Rank #2 (Buy). You can the complete list of today’s Zacks #1 Rank stocks here.
K12’s earnings per share are expected to increase 11.8% in 2018.
RYB Education is expected to record an EPS growth rate of 195.5% next year.
Adtalem has an expected earnings growth rate of 2.5% for the current year.
3 Medical Stocks to Buy Now
The greatest discovery in this century of biology is now at the flashpoint between theory and realization. Billions of dollars in research have poured into it. Companies are already generating revenue, and cures for a variety of deadly diseases are in the pipeline.
So are big potential profits for early investors. Zacks has released an updated Special Report that explains this breakthrough and names the best 3 stocks to ride it.
See them today for free >>