Career Education Goes Negative

Seth Jayson, The Motley Fool
Updated

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.

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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.

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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.

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At the time thisarticle 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.

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