Bridgepoint Education Shares Plunged: What You Need to Know

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What:Bridgepoint Education (NYS: BPI) dropped 13% in intraday trading today after disappointing guidance overshadowed a large positive earnings surprise.

So what: Second-quarter EPS of $0.90 rose 55% year over year and trounced the $0.69 consensus estimate. Revenue of $240 million increased 38% and was well ahead of consensus forecast of $230 million.

Now what: The company revised 2011 guidance to EPS of $2.56 to $2.68 and revenue of $886 million to $902 million. While the consensus estimate of $2.57 is toward the low end of the range, the $0.22 EPS beat in the second quarter indicates that estimates for the second half of the year are too high. The revenue guidance was also disappointing compared with the consensus forecast of $904 million. Management expects student enrollment for the year of 79,500 to 83,500, a decline from 84,545 at the end of the second quarter. The earnings press release did not offer an explanation for the anticipated second-half slowdown.

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At the time thisarticle was published Fool contributor Cindy Johnson does not own shares of any company named above. We Fools may not all hold the same opinions, but we all believe thatconsidering a diverse range of insightsmakes us better investors. The Motley Fool has adisclosure policy.

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