Strayer Shares Dropped: What You Need to Know

Matt Koppenheffer, The Motley Fool

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: Shares of for-profit education company Strayer Education (NAS: STRA) got reprimanded by investors today as they bid shares down as much as 11% in intraday trading after the company announced fourth-quarter results.

So what: Let's go with the good news first. For the final quarter of the year, Strayer's results were better than expected. The company reported $2.30 in earnings per share on $156 million in revenue. Though both results were lower than the year before, Wall Street had expected revenue of $155 million and per-share profit of just $2.26.

Now what: Though the fourth quarter's numbers were a pleasant surprise, investors were less than thrilled about Strayer's signals about what might lie ahead. The decline in enrollment seems to be moderating, but the company still reported an 8% decrease in new student enrollments. For obvious reasons, fewer students portend lower results for an educator like Strayer. At the same time, management projected first-quarter earnings per share of between $2.07 and $2.09, well below the current average analyst estimate of $2.24.

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At the time thisarticle was published Fool contributorMatt Koppenhefferdoes not have a financial interest in any of the companies mentioned. You can check out what Matt is keeping an eye on by visiting hisCAPS portfolio, or you can follow Matt on Twitter@KoppTheFoolorFacebook.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 Fool'sdisclosure policyprefers dividends over a sharp stick in the eye.

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