Career Education Earnings Preview

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Career Education (NAS: CECO) came in under analysts' estimates last quarter, but now have a chance to fix things this quarter. The company will unveil its latest earnings on Wednesday, Nov. 9. Career Education is a global education company that provides on-ground private, for-profit, post-secondary education in the United States and also has a presence in online education.

What analysts say:

  • Buy, sell, or hold?: Analysts think investors should stand pat on Career Education, with eight out of 11 analysts rating it hold. Analysts don't like Career Education as much as competitor Grand Canyon Education overall. Five out of six analysts rate Grand Canyon Education a buy compared to one out of 11 for Career Education.
  • Revenue forecasts: On average, analysts predict $467.5 million in revenue this quarter. That would represent a decline of 13.9% from the year-ago quarter.
  • Wall Street earnings expectations: The average analyst estimate is earnings of $0.36 per share. Estimates range from $0.22 to $0.46.

What our community says:
CAPS All-Stars are solidly backing the stock, with 88.5% awarding it an outperform rating. The community at large agrees with the All-Stars, with 86.1% assigning it a rating of outperform. Fools are keen on Career Education, though the message boards have been quiet lately, with only 75 posts in the past 30 days. Despite the majority sentiment in favor of Career Education, the stock has a middling CAPS rating of three out of five stars.

Management:
Career Education's income has fallen year over year by an average of 4.1% over the past five quarters. A year-over-year revenue decrease last quarter snaps a streak of three consecutive quarters of revenue increases. The company's gross margin shrank by 2.6 percentage points in the last quarter. Revenue fell 5.8% while cost of sales rose 2.2% to $161.5 million from a year earlier.

Now let's look at how efficient management is at running the business. Traditionally, margins represent the efficiency with which companies capture portions of sales dollars. The following table shows gross, operating, and net margins over the past four quarters.

Quarter

Q2

Q1

Q4

Q3

Gross Margin

67.5%

68.9%

70.2%

69.6%

Operating Margin

16.6%

20.8%

4.5%

7.3%

Net Margin

11.1%

13.4%

2.2%

5%

For all our Career Education-specific analysis, including earnings and beyond, add Career Education to My Watchlist.

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At the time this article was published

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