Apollo Group’s Results Look Better Than They Are

On a GAAP basis, EPS totaled $0.12, which excludes a restructuring charge of $44.1 million and a credit of $6.4 million related to favorable resolution of legal matters. GAAP EPS in the same quarter a year ago was $0.49.

Apollo reported degreed enrollment down 15.5% year-over-year for the second quarter, and a decline of 20.1% in new degree-student enrollment. Both figures are worse than the first quarter losses.

At the end of the first quarter, the company forecast full year revenue of $3.65 billion to $3.75 billion and annual operating income of $500 million to $550 million. Apollo Group stuck with those forecasts today.

The company’s CEO said:

Higher education is rapidly evolving as workforce demands and technological innovations drive change in our global economy. We are further positioning our organization and brand with our continued commitment to help students acquire real workplace skills, achieve their academic goals, and — through the power of education — realize their career aspirations.

Apollo’s operating income fell from $103.7 million in the second quarter of 2012 to just $29.8 million in the second quarter of 2013. At that rate, once the company stops restructuring, operating income and EPS could evaporate.

The company also noted a new $250 million share buyback program authorized by its board last Friday. There is no expiration date on the authorization.

Apollo’s shares are up about 5.6% in premarket trading today, at $17.99 in a 52-week range of $15.98 to $43.80. Thomson Reuters had a consensus analyst price target of $25.70 before today’s report.