A
massive second quarter loss by Career Education Corp (CECO), sent its shares
plunging nearly 16 percent in in pre-market session to new 12-year low of
$3.95.
The
private education firm reported a loss of $100.2 million, or $1.52 per share,
for the quarter that ended June 30. That's compared with net income of $55.4
million, or 73 cents a share, earned in the corresponding quarter of the last
year.
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Adjusting
for goodwill and impairment charges, the company’s loss calculated at18 cents a
share versus profit of 73 cents per share last year, miss widely against
analysts targeted break even in terms of bottom line.
Career
Education's total revenue dropped to $369 million from $484.9 million on
enrolment declines across its programs. Analysts were expecting revenue of
$383.6 million.
Shares
fell to $3.82 in after-hours trades, after having briefly risen during the day.
The
private sector education sector is facing strong headwinds in terms of a difficult
regulatory environment that is aimed at reducing the role of private
institutions in the overall education sector.
How Should
Investors Trade CECO, Get Free Trend
Analysis
During
the recession, when people were looking to find jobs, companies such as Career
Education saw enrolment soaring but the popularity was accompanied by growing
criticism and a clamour to clamp down on them, as they were seen to be churning
out students who were saddled with a lot of debt but had poor job prospects as
unemployment figure grow.
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