In the latest look at stocks ordered by largest market capitalization, Russell 3000 component Tenneco Inc (NYSE: TEN) was identified as having a larger market cap than the smaller end of the S&P 500, for example Apollo Group, Inc. (NASD: APOL), according to The Online Investor. Click here to find out the top S&P 500 components ordered by average analyst rating »
By Rich Duprey, The Motley Fool
Filed under: Investing
The old investing maxim “sell in May and go away” means we’re quickly approaching the time when the incredible run of the Dow Jones Industrial Average over the past three months will be coming to a close. Yesterday’s five-point loss could be the signal that the market is topping here, and with Europe doing all it can to stop the spread of a financial contagion after its bailout of Cyprus, there seems little reason to believe this bull market will continue much longer.
Yesterday’s big loser was Hewlett-Packard, the first quarter’s big winner, though after a 68% gain over the past three months, a small 2% loss is no big deal. But the landscape for computers hasn’t changed, so now comes the point where the turnaround has to gain traction on its own. I’m not so certain it will, though a broad overview of the markets suggests there are still worse places to be standing right now.
Canary in the coal mine
Coal miner Walter Energy took it on the chin (again) yesterday, falling 8% as the ISM manufacturing index posted its biggest miss to expectations in a year, coming in at 51.3 compared with forecasts of 54.0. The bigger worry, however, is new orders falling all the way down to 51.4 from 57.8, which, coupled with a pullback in China‘s economy, diminishes the prospects for renewed industrial demand and, in turn, greater coal demand. Arch Coal, Peabody Energy , and Consol Energy all tumbled 3% or more yesterday.
Analysts see a particularly tough year ahead for Walter because of the weak pricing environment. It has significant cash obligations coming due this year, with Wall Street looking askance at the $150 million or so in interest payments and total cash obligations of $365 million, both of which combine to put it between a financial rock and a hard place.
It faces outside pressure as well from shareholders agitating for change. Hedge-fund operator SAC Capital Partners recently reported a new 5% stake in the miner, while Audley Capital has publicly expressed doubts about management’s capabilities to turn the company around and wants to oust some directors in favor of its own five-man slate.
As coal miners remain under the gun, there appear to be few catalysts in front of Walter to change its downward trajectory.
Wearing the dunce cap
For-profit educators got schooled yesterday as well, with ITT Educational Services falling almost 9%, Grand Canyon Education dropping 5%, and Corinthian Colleges and Career Education both falling about 3% on the day. The one bright spot was Apollo Group , which rose about 1.5% and is up more than 3% since reporting better-than-expected earnings last week.
Yet even in beating Wall Street forecasts, Apollo showed what the problems are facing the sector: falling revenues, higher expenses, and dwindling student enrollments. When ITT reported fourth-quarter earnings in January, it saw all of those same factors, but it didn’t have the luxury of beating expectations. First-quarter results …read more
Source: FULL ARTICLE at DailyFinance
By Business Wirevia The Motley Fool
Filed under: Investing
Apollo Group, Inc. Reports Second Quarter 2013 Results
PHOENIX–(BUSINESS WIRE)– Apollo Group, Inc. (NAS: APOL) today reported financial results for the three and six months ended February 28, 2013, with second quarter revenue of $834.4 million and diluted earnings per share of $0.12 per share, or $0.34 per share excluding special items.
“Higher education is rapidly evolving as workforce demands and technological innovations drive change in our global economy,” said Apollo Group Chief Executive Officer Greg Cappelli. “We are further positioning our organization and brand with our continued commitment to help students acquire real workplace skills, achieve their academic goals, and – through the power of education – realize their career aspirations.”
Second Quarter 2013 Results of Operations
Results for the second quarter 2013 included restructuring and other charges of $44.1 million attributable to optimization efforts and $6.4 million of credits associated with the favorable resolution of certain legal matters. (See the reconciliation of GAAP financial information to non-GAAP financial information in the tables section of this press release for second quarter 2013 and 2012 special items).
Excluding the special items noted above, income from continuing operations for the second quarter 2013 was $38.0 million, or $0.34 per share, compared to $72.2 million, or $0.57 per share, for the second quarter 2012. The decrease in income from continuing operations was attributable to lower enrollment and an increase in marketing costs primarily due to higher advertising expense, which was partially offset by a reduction in certain costs associated with the Company’s restructuring activities and …read more
Source: FULL ARTICLE at DailyFinance
By Dan Caplinger, The Motley Fool
Filed under: Investing
New investors are consistently surprised when long-hoped-for good news fails to produce a lasting jump in the stock market. This morning, U.S. investors woke up to news of a last-minute deal in Cyprus to avoid a banking collapse, with Cypriot leaders agreeing with the European Union, European Central Bank, and International Monetary Fund upon a “good-bank/bad-bank” scenario that will largely protect small depositors. Yet the relief rally proved short-lived, as plenty of other uncertainties will persist well into the future. By 10:50 a.m. EDT, the Dow Jones Industrial Average had given back its earlier 50-point gains and was actually down 31 points. The broader market did a little better, but the S&P 500 failed to answer the challenge, falling short of its own record highs.
But that didn’t stop some stocks from posting more sizable gains. Among the best performers in the Dow was Home Depot , which rose 0.5%. Despite ups and downs in overall sentiment about the global economy, the one constant lately has been the housing industry’s steepening path to a full recovery. Home Depot is best poised to take full advantage of that trend, having jumped to all-time highs on the strength of its popularity among homeowners and residential contractors alike.
Outside the Dow, Apollo Group soared more than 8% after announcing earnings. The for-profit education company that runs the University of Phoenix saw net income plunge nearly 80% from the year-ago quarter on a 13% drop in revenue, but even those ugly results were better than what analysts had expected. Yet given declining enrollment and the need for increased spending to bring students to class, Apollo could see more contraction in the future before things turn around.
Finally, VirnetX fell another 11.7% this morning, adding to massive losses from earlier this month after the company lost its patent infringement lawsuit against Cisco Systems . VirnetX had won similar cases against tech companies in the past, leading to high expectations that it would beat Cisco, but the unexpected loss has created a crisis of confidence in the stock. Unless VirnetX can demonstrate its ability to bounce back and move forward from the bad news, investors may well choose to continue fleeing the stock.
Once a highflying tech darling, Cisco is now on the radar of value-oriented dividend lovers. Get the low down on the routing juggernaut in The Motley Fool’s premium report. Just click here now to get started.
var FoolAnalyticsData = FoolAnalyticsData || []; FoolAnalyticsData.push({ …read more
Source: FULL ARTICLE at DailyFinance
By Roland Head, The Motley Fool
Filed under: Investing
LONDON — Stock index futures at 7 a.m. EDT indicate that the Dow Jones Industrial Average may open 0.28% higher this morning, while the S&P 500 may open up by 0.42%.
Stocks may move higher this morning following news that a bailout deal has been agreed for Cyprus that should prevent the country from being forced into a disorderly default and possible euro exit. Cyprus will receive 10 billion euros in aid from the European Union, and all bank depositors with less than 100,000 euros in savings will be protected from losses, in line with the country’s deposit guarantee scheme. The Bank of Cyprus will take over “good” assets from the Cyprus Popular Bank, which will be shut down. Bondholders and savers with more than 100,000 euros in accounts at both banks will see heavy losses, and the plan will see the country’s financial sector shrink dramatically. Strict capital controls have been put in place that will prevent savers from withdrawing their funds from Cypriot banks, which remain closed today for a scheduled bank holiday but are expected to open later this week.
European stock markets rose following this news, and London’s FTSE 100 was 0.93% higher by 7:30 a.m. EDT, helped by a 3.2% rise for telecom group Vodafone, which rose on renewed speculation that it is moving closer to a deal to sell its share of Verizon Wireless to Verizon later this year.
In U.S. corporate news today, Dollar General reported fourth-quarter earnings this morning. The company earned $0.97 per share on revenue of $4.21 billion, topping analyst estimates of $0.90 in EPS and $4.26 billion in sales. Meanwhile, education company Apollo Group beat on the top and bottom lines this morning, reporting second-quarter EPS of $0.34 (excluding items) on revenue of $834.4 million versus estimates of $0.18 and $822.8 million, respectively.
Dell may also return to the spotlight this morning following reports that the company is evaluating bids from both Blackstone Group and Carl Icahn, who both place a higher value on the company’s shares than founder Michael Dell‘s private-equity-backed bid. BlackBerry stock is also likely to see further active trading today: The company’s share price fell by almost 8% on Friday after it failed to impress investors with the U.S. launch of the its new Z10 smartphone. BlackBerry’s shares fell by a further 5.9% in German trading this morning, suggesting that its sell-off may continue when U.S. markets open.
Finally, let’s not forget the Dow’s daily movements can add up to some serious long-term gains. Indeed, Warren Buffett recently wrote, “The Dow advanced from 66 to 11,497 in the 20th Century, a staggering 17,320% increase that materialized despite four costly wars, a Great Depression and many recessions.” If you, like Buffett, are convinced about the long-term power of the Dow, you should read “5 Stocks To Retire On.” Your long-term wealth could be transformed, even in this uncertain economy. Simply click here now to download this free, no-obligation …read more
Source: FULL ARTICLE at DailyFinance
By Dan Caplinger, The Motley Fool
Filed under: Investing
Earnings season is just about over, with almost all companies already having reported their quarterly results. But there are still a few companies left to report, and Apollo Group is about to release its quarterly earnings report. The key to making smart investment decisions with stocks releasing their quarter reports is to anticipate how they’ll do before they announce results, leaving you fully prepared to respond quickly to whatever inevitable surprises arise. That way, you’ll be less likely to make an uninformed kneejerk reaction to news that turns out to be exactly the wrong move.
For-profit education has been under siege lately and, as the operator of the industry-leading University of Phoenix, Apollo Group has been at the forefront of the controversy over the business. Let’s take an early look at what’s been happening with Apollo Group over the past quarter, and what we’re likely to see in its quarterly report on Monday.
Stats on Apollo Group
|
|
|
|---|---|
|
Analyst EPS Estimate |
$0.18 |
|
Change From Year-Ago EPS |
(69%) |
|
Revenue Estimate |
$822.8 million |
|
Change From Year-Ago Revenue |
(15%) |
|
Earnings Beats in Past 4 Quarters |
4 |
Source: Yahoo! Finance.
Will Apollo Group stay smart this quarter?
Over the past few months, analysts have greatly reduced their views on Apollo Group‘s earnings. They’ve cut their calls for the most recent quarter by $0.12 per share, although reducing a bit more modestly their full-year fiscal 2013 earnings estimates by $0.08 per share. The stock, meanwhile, hasn’t done well, falling almost 19% since mid-December.
For years, Apollo Group and its peers benefited from the need for workers laid off during the recession to return to school to get training for other careers. But, more recently, enrollment has declined dramatically. Back in January, Apollo said that its overall enrollment was down 14%, with a 15% drop in new-student enrollment. That’s consistent with what peers have seen lately. ITT Education saw its total and new-student enrollment figures fall 17% and 14%, respectively. DeVry , which has its largest emphasis on business, technology, and management, saw segment enrollment drop 15% in total, and almost 5% for new-student enrollment.
On top of bad business fundamentals, Apollo and its peers have faced scrutiny from regulators and other bodies on areas from loan defaults to student retention. For instance, Corinthian Colleges’ loan default rate of 28.8% greatly exceeds the 25% level at which federal regulations could result in loss of Federal Direct Student Loans and Pell Grants as funding sources. At Apollo, the U.S. government is responsible for 91% of the company’s consolidated revenue and more than 100% of its operating income, putting the for-profit educator on a path toward potentially violating the Department of Education’s 90/10 rule. Moreover, with the Higher Learning Commission having put the University of Phoenix on probation, the issues of student retention and graduation rates remain important as industry watchdogs look …read more
Source: FULL ARTICLE at DailyFinance
In the latest look at stocks ordered by largest market capitalization, Russell 3000 component DigitalGlobe Inc (NYSE: DGI) was identified as having a larger market cap than the smaller end of the S&P 500, for example Apollo Group, Inc. (NASD: APOL), according to The Online Investor. Click here to find out the top S&P 500 components ordered by average analyst rating » …read more
Source: FULL ARTICLE at Forbes Markets
Filed under: Technology, U.S. Government, Industry News, Economy
Apollo Group, Inc. (NASDAQ: APOL) is showing some more negative news in the fields of online education and for-profit education. The company submitted and SEC filing on Monday showing that its University of Phoenix subsidiary received a notice of Probation from The Higher Learning Commission on February 22. This is a commission member of the North Central Association of Colleges and Schools regarding the ongoing accreditation reaffirmation review of the University.
HLC is the university’s institutional accreditor and the end result is that the peer review team determined that the University of Phoenix is not in compliance with Criterion One of the Criteria for Accreditation, Core Component 1d, and certain of the related Minimum Expectations. These points all relate to the university’s administrative structure and governance.
The team has now recommended that HLC place the University on Probation status as the University of Phoenix has insufficient autonomy in relation to its parent (Apollo Group) as far as its board of directors management independence.
Some good news was included: the team found that University of Phoenix was in compliance with substantially all other Criteria of Accreditation, including the criteria associated with academic matters and student services, and, with one recommendation of a follow up report, all the applicable Federal Compliance Program Components. It was also noted that this team “specifically noted that the University is well resourced and innovative and has many strengths, including a high level of relevant student services and technology and systems that benefit students and provide a consistent approach to facilitate learning across its programs and facilities.”
Some of this data had been telegraphed by the company before but on a lesser scale. It previously disclosed in January that the HLC had informed University of Phoenix that the draft review report would include a recommendation that the University be placed on Notice status. The problem is that this “Probation” is worse than the “Notice” status. Apollo said in the filing that the HLC did not explain why the recommendation changed from Notice to Probation.
The University of Phoenix did say that it intends to challenge and appeal this formal Probation recommendation while it works with HLC to reach an agreement on an appropriate governance model. The draft report also identified other areas of concern which will require future reporting and follow-up activities by the University. While those were not said to be the basis of the Probation, these include retention and graduation rates, sufficiency of Ph.D program faculty research activity, the reliance on federal student financial aid, assessment of student learning; and documenting credit hour policies and practices with regard to learning outcomes of learning teams.
Here is the problem for the university and for Apollo:
If the Probation recommendation is approved, the draft report recommends a probationary period through the Fall of 2014, with the requirement that University of Phoenix submit a probation report at that time demonstrating that the specified matters have been ameliorated. In addition, the …read more
Source: FULL ARTICLE at DailyFinance
In the latest look at stocks ordered by largest market capitalization, Russell 3000 component TCF Financial Corp. (NYSE: TCB) was identified as having a larger market cap than the smaller end of the S&P 500, for example Apollo Group, Inc. (NASD: APOL), according to The Online Investor. Click here to find out the top S&P 500 components ordered by average analyst rating » …read more
Source: FULL ARTICLE at Forbes Markets
By DividendChannel.com In the latest look at stocks ordered by largest market capitalization, Russell 3000 component Watsco Inc. (NYSE: WSO) was identified as having a larger market cap than the smaller end of the S&P 500, for example Apollo Group, Inc. (NASD: APOL), according to The Online Investor. Click here to find out the top S&P 500 components ordered by average analyst rating »
Source: FULL ARTICLE at Forbes Markets
By DividendChannel.com In the latest look at stocks ordered by largest market capitalization, Russell 3000 component MAXIMUS Inc. (NYSE: MMS) was identified as having a larger market cap than the smaller end of the S&P 500, for example Apollo Group, Inc. (NASD: APOL), according to The Online Investor. Click here to find out the top S&P 500 components ordered by average analyst rating »
Source: FULL ARTICLE at Forbes Markets
By Narrative Science Analysts expect decreased profit for Apollo Group (APOL) when the company reports its first quarter results on Tuesday, January 8, 2013. Although Apollo reported profit of $1.28 a year ago, the consensus estimate calls for earnings per share of 90 cents.
Source: FULL ARTICLE at Forbes Markets
