Career Education Earnings Preview

Motley Fool Staff
Updated

Watch Career Education's (NAS: CECO) earnings report to see whether it can beat analyst expectations for the fifth consecutive quarter. The company will unveil its latest earnings on Wednesday, Aug. 3. Career Education is a global education company, which is an on-ground provider of private, for-profit, postsecondary 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 13 of 17 rating it hold. Analysts like Career Education better than competitor Strayer Education overall. Three out of 16 analysts rate Strayer Education a buy, compared with four of 17 for Career Education. Analysts still rate the stock a hold, but they are a bit more wary about it compared with three months ago.

  • Revenue forecasts: On average, analysts predict $504.5 million in revenue this quarter. That would represent a decline of 4.4% from the year-ago quarter.

  • Wall Street earnings expectations: The average analyst estimate is earnings of $0.65 per share. Estimates range from $0.51 to $0.74.

What our community says:
CAPS All-Stars are solidly behind the stock, with 83.3% giving it an "outperform" rating. The community at large agrees with the All-Stars, with 84% assigning it a rating of "outperform." Fools are keen on Career Education, though the message boards have been quiet lately, with only 71 posts in the past 30 days. Career Education's bearish CAPS rating of two out of five stars falls short of the Fool community's sentiment.

Management:
Career Education's profit has risen year over year by an average of more than threefold. Revenue has now gone up for three straight quarters.

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

Q1

Q4

Q3

Q2

Gross Margin

68.9%

70.2%

69.6%

70.1%

Operating Margin

20.8%

4.5%

7.3%

18.1%

Net Margin

13.4%

2.2%

5%

12.2%

We can help you keep tabs on your companies with My Watchlist, our free, personalized service. Add Career Education now.

At the time thisarticle was published Try any of our Foolish newsletter services free for 30 days. We Fools don't 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 - 2011 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

Advertisement