Boston, MA 05/08/2014 (wallstreetpr) – Strayer Education Inc. (NASDAQ:STRA) continues to struggle with student enrollment in most of its institutions evidenced in its first quarter financial earnings. Enrollment for the spring session was down by 10% to 41,327 students mostly as a result of a decline in continuing student enrollment. New student enrollment was up by 1% a mere fraction that could not offset the decline of 13% in continuing student enrollment.
Earnings Impacted by Share Repurchase
Continued unemployment continues to affect many institutions making it extremely impossible for people to enroll into schools. Overall economic downturn and a decline in student demand are, on the other hand, not doing any good to reverse the situation. There is strong belief in the industry that total enrollment could further drop by double digits in the year.
Despite a reduction in student enrollment, Strayer Education Inc. (NASDAQ:STRA)’s adjusted earnings came in at $1.40 a share easily beating estimates of $1.29 by 8.5%. Strong earnings in this case were as a result of lower outstanding share count that has been attributed to share repurchases in the previous quarters. Earnings, on the other hand, were down by 12% compared to high levels of $1.59 that had been achieved the prior year.
Revenue drop on Enrollment Decline
Strayer revenue, on the other hand, felt the full force of a decline in student enrollment as it dropped by 15% compared to the same period last year, to $116.5 million. Lower revenue per student and one less selling day in the quarter affected total revenues for the quarter. Total revenue per student as a result of reduced student enrollment decreased by 1.2%.
Things could turn for the worse as estimates point to a decline of between 4% and 5% in total student’s enrollment in the year. New cuts in Undergraduate tuition fee also continue to affect revenue margins. Strayer did not repurchase any shares in the quarter consequently resulting in cash and cash equivalents of $126.2 million as of March 31, 2014, compared to $47.5 million as of December 31, 2013.
Strayer Education Inc. (NASDAQ:STRA) now has a total of 10,843,301 common shares issued and 286,647 shares of restricted stock
