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American Public's (APEI) Stock Up Despite Q1 Earnings Miss

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American Public Education, Inc. (APEI - Free Report) reported mixed results in first-quarter 2020, wherein earnings missed the Zacks Consensus Estimate, while revenues beat the same. Notably, both the metrics were within management’s respective guided ranges.

Shares of this online provider of higher education spiked nearly 11% in the after-hour trading session on May 12, after the earnings release. Investors’ sentiment might have got a boost owing to record spring-term enrollment despite coronavirus woes. The company registered nearly 56% growth in new student enrollment and a 14% increase in total student enrollment for the second quarter.

Delving Deeper

The company’s adjusted earnings of 16 cents per share lagged the consensus estimate of 17 cents by 5.9%. The reported figure also decreased a whopping 50% on a year-over-year basis.

American Public Education Inc Price, Consensus and EPS Surprise

Total revenues of $74.6 million, which topped the consensus mark of $74.2 million by 0.6%, increased 1.6% from the year-ago period. The upside was mainly driven by a 2.1% increase in the APEI segment’s revenues, partially offset by a 2.7% decrease in Hondros College of Nursing (“HCN”) revenues.

Total costs and expenses during the quarter decreased 0.2% year over year.

Segment Discussion

APEI’s revenues of $67.1 million grew 2.1% from the year-ago period. Within the APEI segment, American Public University System’s (“APUS”) student enrollment grew 2% from the comparable year-ago period to 82,800 at March-end. During the quarter, total net course registration inched up 1% from the year-ago quarter to 84,800. Net course registrations by new students remained on par with the prior-year figure of 10,100.

At HCN, revenues decreased 2.7% year over year to $7.5 million owing to reduced enrollments. Total student enrollment at HCN dropped 9% to 1,570, while new student enrollment rose 31% from the prior-year quarter to 444.

During the quarter, inter-segment elimination totaled $17 million.

Financials

As of Mar 31, 2020, American Public had total cash and cash equivalents of $196.8 million compared with $202.7 million at 2019-end. Capital expenditure totaled $1.9 million in the first quarter compared with $1.6 million in the comparable year-ago period.

Second-Quarter 2020 Guidance

The company expects total revenues to grow 8-12% from a year ago. It anticipates earnings within 20-25 cents per share, indicating a decline from the year-ago reported figure of 30 cents.

Net course registrations by new students at APUS are expected to increase within 8-12% year over year. Total net course registrations are likely to grow 6-10% year over year.

Zacks Rank & Peer Releases

American Public, which shares space with Laureate Education Inc. (LAUR - Free Report) in the Zacks Schools industry, currently carries a Zacks Rank #3 (Hold). You can the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Strategic Education, Inc. or SEI (STRA - Free Report) reported stellar results in first-quarter 2020, wherein earnings and revenues not only topped analysts’ expectations but also grew from the year-ago level. The uptick was mainly backed by strong top-line numbers, and margins in Strayer and Capella universities.

Adtalem Global Education Inc. (ATGE - Free Report) reported impressive earnings in third-quarter fiscal 2020. Its earnings not only topped the Zacks Consensus Estimate but also grew strongly on a year-over-year basis on the back of new student enrollments, employer partnerships and prudent cost management across the business.

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