{"id":5735,"date":"2015-02-08T13:50:36","date_gmt":"2015-02-08T19:50:36","guid":{"rendered":"http:\/\/news.medill.northwestern.edu\/chicago\/?p=5735"},"modified":"2015-02-09T06:13:29","modified_gmt":"2015-02-09T12:13:29","slug":"devrys-stock-tanks-as-on-declining-enrollment","status":"publish","type":"post","link":"https:\/\/news.medill.northwestern.edu\/chicago\/devrys-stock-tanks-as-on-declining-enrollment\/","title":{"rendered":"DeVry\u2019s stock tanks as enrollment declines"},"content":{"rendered":"

By Lucy Ren<\/p>\n

The stock of DeVry Education Group Inc., one of the largest educational organizations in the world with subsidiaries including Carrington College and DeVry University, plummeted 18.1 percent, as the company\u2019s adjusted earnings per share of 75 cents fell short of the consensus estimate of 78 cents.<\/p>\n

\"DeVry\u2019s<\/a>
DeVry\u2019s stock plummeted 18.1 percent Friday as Q2 earnings fell short of estimate. (Yahoo Finance)<\/figcaption><\/figure>\n

DeVry\u2019s second quarter<\/a> net income decreased 11.9 percent to $42.41 million, or 65 cents per diluted share, from $48.16 million, or 75 cents per diluted share a year ago. Its quarterly revenue declined 1.3 percent to $484.88 million from $491.27 million a year ago.<\/p>\n

\u201cThe biggest problem they are facing is that their core business, DeVry University<\/a>, continues to shrink, suffering from a lack of new students demand,\u201d said Trace Urdan, managing director at Wells Fargo Securities. \u201cThey are trying hard to stabilize that decline and get back to growing again.\u201d<\/p>\n

The Downers Grove-based, for-profit education company\u2019s total post-secondary enrollments declined 0.1 percent. Revenue grew at most of its institutions, most notably at Chamberlain and DeVry Brasil, with the exception of DeVry University.<\/p>\n

DeVry continued to execute a turnaround and transformation plan to reduce its cost structure, including a new advertising campaign and cost savings that could exceed the prior $90 million target, according to Thursday\u2019s conference call.<\/p>\n

\u201cIt will take time for management\u2019s plan to gain traction,\u201d wrote analyst Alexander Paris of Barrington Research Associates Inc. He said the company will be \u201cprofitable at the institution level as it aligns its cost structure to enrollment levels at DeVry University.\u201d<\/p>\n

Urdan said DeVry\u2019s \u201chigh pricing\u201d is an issue leading to the declining enrollment, especially because \u201cother schools that they compete with have dropped their tuitions.\u201d The low enrollment also \u201crelates to where we are in the economic cycle,\u201d Urdan added, \u201cAs the labor market heats up sufficiently, it would draw students back in.\u201d<\/p>\n

[soundcloud url=”https:\/\/api.soundcloud.com\/tracks\/189899447″ params=”color=74d1db&auto_play=false&hide_related=false&show_comments=true&show_user=true&show_reposts=false” width=”100%” height=”166″ iframe=”true” \/]<\/p>\n

Wells Fargo Securities’ Trace Urdan explains the lack of \u201cconsumer confidence\u201d in DeVry University.<\/div>\n

\u201cAs a tactic, DeVry is going after the \u2018grade completers,\u2019\u201d Urdan said. \u201cThese are the people who have some amount of college, they have accumulated some credits, but they never completed it.\u201d He said DeVry is facing fierce competition because not-for-profit colleges also appeal to these students.<\/p>\n

As for the current quarter, DeVry\u2019s President Daniel Hamburger said in the conference call that management expects \u201crelatively flat\u201d revenue, as anticipated declines at DeVry University will \u201coffset revenue growth at its other institutions,\u201d especially in the medical and health care and professional education segments.<\/p>\n

Jeffrey Silber, analyst at BMO Capital Markets Corp., wrote in a note that he was surprised to see the medical and healthcare segments \u201cslowing with margins.\u201d<\/p>\n

\"EPS\"<\/a>
DeVry\u2019s annual and second quarter earnings per share have been experiencing consistent declines. (Lucy Ren\/Medill)<\/figcaption><\/figure>\n

DeVry announced two more acquisitions in Brazil in December. DeVry Brasil now serves 33,000 students in 13 campuses in northeastern Brazil.<\/p>\n

Management anticipates DeVry\u2019s operating costs to \u201cincrease about 4.5 percent sequentially,\u201d Hamburger said in the conference call. He attributed the increase to expenses in \u201ccampus expansion at Chamberlain,\u201d \u201cthe recent acquisitions in Brazil\u201d and the increase in advertisement for DeVry University.<\/p>\n

Paris declared that DeVry is a \u201chigh-quality company\u201d but needs \u201cstabilization at the flagship university.\u201d He believes the company is \u201cdoing the right things to get DVU back on track and to fuel continued growth in its other segments.\u201d<\/p>\n

For the six months ended on December 31, DeVry\u2019s revenue decreased to $875.48 million from $877.21 a year ago. Its net income increased to $62.85 million from $41.02 million.<\/p>\n

The closing price on Friday was $36.24, a decrease of $8.01.<\/p>\n

Photo on top:At least half of the programs offered at DeVry University are IT-oriented. (DeVry Group)<\/div>\n","protected":false},"excerpt":{"rendered":"

By Lucy Ren The stock of DeVry Education Group Inc., one of the largest educational organizations in the world with subsidiaries including Carrington College and DeVry University, plummeted 18.1 percent, as the company\u2019s adjusted earnings per share of 75 cents fell short of the consensus estimate of 78 cents.<\/p>\n","protected":false},"author":29,"featured_media":5752,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[27,1],"tags":[],"class_list":["post-5735","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business","category-uncategorized"],"yoast_head":"\nDeVry\u2019s stock tanks as enrollment declines - Medill Reports Chicago<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/news.medill.northwestern.edu\/chicago\/devrys-stock-tanks-as-on-declining-enrollment\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"DeVry\u2019s stock tanks as enrollment declines - Medill Reports Chicago\" \/>\n<meta property=\"og:description\" content=\"By Lucy Ren The stock of DeVry Education Group Inc., one of the largest educational organizations in the world with subsidiaries including Carrington College and DeVry University, plummeted 18.1 percent, as the company\u2019s adjusted earnings per share of 75 cents fell short of the consensus estimate of 78 cents.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/news.medill.northwestern.edu\/chicago\/devrys-stock-tanks-as-on-declining-enrollment\/\" \/>\n<meta property=\"og:site_name\" content=\"Medill Reports Chicago\" \/>\n<meta property=\"article:published_time\" content=\"2015-02-08T19:50:36+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2015-02-09T12:13:29+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/s3.amazonaws.com\/medill.wordpress.offload\/WP%20Media%20Folder%20-%20medill-reports-chicago\/wp-content\/uploads\/sites\/3\/2015\/02\/devry-student.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"1100\" \/>\n\t<meta property=\"og:image:height\" content=\"552\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"lucyren7\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"lucyren7\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"3 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/news.medill.northwestern.edu\/chicago\/devrys-stock-tanks-as-on-declining-enrollment\/\",\"url\":\"https:\/\/news.medill.northwestern.edu\/chicago\/devrys-stock-tanks-as-on-declining-enrollment\/\",\"name\":\"DeVry\u2019s stock tanks as enrollment declines - Medill Reports Chicago\",\"isPartOf\":{\"@id\":\"https:\/\/news.medill.northwestern.edu\/chicago\/#website\"},\"primaryImageOfPage\":{\"@id\":\"https:\/\/news.medill.northwestern.edu\/chicago\/devrys-stock-tanks-as-on-declining-enrollment\/#primaryimage\"},\"image\":{\"@id\":\"https:\/\/news.medill.northwestern.edu\/chicago\/devrys-stock-tanks-as-on-declining-enrollment\/#primaryimage\"},\"thumbnailUrl\":\"https:\/\/s3.amazonaws.com\/medill.wordpress.offload\/WP%20Media%20Folder%20-%20medill-reports-chicago\/wp-content\/uploads\/sites\/3\/2015\/02\/devry-student.jpg\",\"datePublished\":\"2015-02-08T19:50:36+00:00\",\"dateModified\":\"2015-02-09T12:13:29+00:00\",\"author\":{\"@id\":\"https:\/\/news.medill.northwestern.edu\/chicago\/#\/schema\/person\/84daf34e2c92d584a42554a1fea6da6f\"},\"breadcrumb\":{\"@id\":\"https:\/\/news.medill.northwestern.edu\/chicago\/devrys-stock-tanks-as-on-declining-enrollment\/#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/news.medill.northwestern.edu\/chicago\/devrys-stock-tanks-as-on-declining-enrollment\/\"]}]},{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/news.medill.northwestern.edu\/chicago\/devrys-stock-tanks-as-on-declining-enrollment\/#primaryimage\",\"url\":\"https:\/\/s3.amazonaws.com\/medill.wordpress.offload\/WP%20Media%20Folder%20-%20medill-reports-chicago\/wp-content\/uploads\/sites\/3\/2015\/02\/devry-student.jpg\",\"contentUrl\":\"https:\/\/s3.amazonaws.com\/medill.wordpress.offload\/WP%20Media%20Folder%20-%20medill-reports-chicago\/wp-content\/uploads\/sites\/3\/2015\/02\/devry-student.jpg\",\"width\":1100,\"height\":552,\"caption\":\"At least half of the programs offered at DeVry University are IT-oriented. 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