Apollo Group Crushes Earnings Estimates

Seth Jayson, The Motley Fool
Updated

Apollo Group (NAS: APOL) reported earnings on June 25. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended May 31 (Q3), Apollo Group beat slightly on revenues and crushed expectations on earnings per share.

Compared to the prior-year quarter, revenue contracted and GAAP earnings per share shrank significantly.


Margins dropped across the board.

Revenue details
Apollo Group chalked up revenue of $1.13 billion. The 16 analysts polled by S&P Capital IQ predicted a top line of $1.12 billion on the same basis. GAAP reported sales were 8.5% lower than the prior-year quarter's $1.24 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
EPS came in at $1.20. The 19 earnings estimates compiled by S&P Capital IQ predicted $0.96 per share. GAAP EPS of $1.13 for Q3 were 25% lower than the prior-year quarter's $1.51 per share.

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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 58.4%, 450 basis points worse than the prior-year quarter. Operating margin was 21.0%, 720 basis points worse than the prior-year quarter. Net margin was 11.9%, 530 basis points worse than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $1.01 billion. On the bottom line, the average EPS estimate is $0.50.

Next year's average estimate for revenue is $4.29 billion. The average EPS estimate is $3.49.

Investor sentiment
The stock has a two-star rating (out of five) at Motley Fool CAPS, with 811 members out of 955 rating the stock outperform, and 145 members rating it underperform. Among 244 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 191 give Apollo Group a green thumbs-up, and 53 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 $47.93.

The article Apollo Group Crushes Earnings Estimates originally appeared on Fool.com.

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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