Apollo Group Crushes Earnings Estimates

Seth Jayson, The Motley Fool
Updated

Apollo Group (NAS: APOL) reported earnings yesterday. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended Feb. 29 (Q2), Apollo Group beat expectations on revenues and crushed expectations on earnings per share.

Compared to the prior-year quarter, revenue dropped, and GAAP earnings per share improved.


Gross margins dropped, operating margins dropped, and net margins grew.

Revenue details
Apollo Group booked revenue of $969.6 million. The 15 analysts polled by S&P Capital IQ expected net sales of $933.3 million on the same basis. GAAP reported sales were 7.5% lower than the prior-year quarter's $1.05 billion.

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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 $0.58. The 18 earnings estimates compiled by S&P Capital IQ predicted $0.38 per share on the same basis. GAAP EPS were $0.51 for Q2 compared to -$0.45 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 55.7%, 410 basis points worse than the prior-year quarter. Operating margin was 12.6%, 630 basis points worse than the prior-year quarter. Net margin was 6.6%, 1,270 basis points better than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $1.12 billion. On the bottom line, the average EPS estimate is $0.95.

Next year's average estimate for revenue is $4.27 billion. The average EPS estimate is $3.39.

Investor sentiment
The stock has a two-star rating (out of five) at Motley Fool CAPS, with 809 members rating the stock outperform and 145 members rating it underperform. Among 256 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 204 give Apollo Group a green thumbs-up, and 52 give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Apollo Group is outperform, with an average price target of $54.

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. The Motley Fool has a disclosure policy. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.

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