Career Education Goes Negative

Before you go, we thought you'd like these...
Before you go close icon

Career Education (NAS: CECO) reported earnings on Feb. 27. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended Dec. 31 (Q4), Career Education met expectations on revenues and beat expectations on earnings per share.

Compared to the prior-year quarter, revenue shrank significantly and GAAP earnings per share shrank to a loss.

Margins contracted across the board.

Revenue details
Career Education tallied revenue of $439.5 million. The 11 analysts polled by S&P Capital IQ expected net sales of $436.5 million on the same basis. GAAP reported sales were 19% lower than the prior-year quarter's $542.9 million.

anImage

Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.

EPS details
Non-GAAP EPS came in at $0.31. The 12 earnings estimates compiled by S&P Capital IQ predicted $0.26 per share on the same basis. GAAP EPS were -$1.64 for Q4 compared to $0.15 per share for the prior-year quarter.

anImage

Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.

Margin details
For the quarter, gross margin was 64.5%, 510 basis points worse than the prior-year quarter. Operating margin was 4.5%, 1,250 basis points worse than the prior-year quarter. Net margin was -27.4%, 2,960 basis points worse than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $429.5 million. On the bottom line, the average EPS estimate is $0.34.

Next year's average estimate for revenue is $1.62 billion. The average EPS estimate is $1.09.

Investor sentiment
The stock has a three-star rating (out of five) at Motley Fool CAPS, with 168 members out of 193 rating the stock outperform, and 25 members rating it underperform. Among 59 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 52 give Career Education a green thumbs-up, and seven give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Career Education is hold, with an average price target of $9.63.

Over the decades, small-cap stocks like Career Education have produced market-beating returns, provided they're value-priced and have solid businesses. Read about a pair of companies with a lock on their markets in "Too Small to Fail: 2 Small Caps the Government Won't Let Go Broke." Click here for instant access to this free report.

At the time this article was published Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor ofMotley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Copyright © 1995 - 2012 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

Read Full Story

Want more news like this?

Sign up for Finance Report by AOL and get everything from business news to personal finance tips delivered directly to your inbox daily!

Subscribe to our other newsletters

Emails may offer personalized content or ads. Learn more. You may unsubscribe any time.

From Our Partners