KFDA - NewsChannel 10 / Amarillo News, Weather, SportsCapella 3Q profit rises as enrollments accelerate
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MINNEAPOLIS (AP) - For-profit education provider Capella Education Co. said on Tuesday that accelerating enrollment in its online degree programs drove profit up more than 69 percent in the third quarter.
Capella also raised its sales and margins guidance for the year.
The company said total enrollments grew 27.7 percent to 30,738 students at the end of the third quarter from a year ago, compared to enrollment growth of 18.7 percent in the same period in 2008.
For-profit education companies' enrollments are tightly linked to unemployment. As joblessness rises, more students are seeking to help their chances with additional degrees and classes.
The unemployment rate was 9.8 percent in September and is expected to peak above 10 percent by early next year.
Capella said it earned $9.8 million, or 57 cents per share, in the three months ended Sept. 30. In the same period last year, the company earned $5.8 million, or 34 cents per share.
Sales rose 28.1 percent to $83.6 million from $65.2 million.
Analysts polled by Thomson Reuters expected earnings of 51 cents per share on revenue of $81.2 million.
Capella also predicted higher sales and profit margins for the year due to productivity gains in administration and learner support services.
Shares of Capella added $2.91, or 4.2 percent, to $72.99 in morning trading. They have ranged from $36.05 to $75 over the past year.
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