For-profit education company DeVry Inc. (NYSE:DV) late Thursday reported a 44 percent fall in its first quarter profit as enrolment numbers fell, but still managed to beat Street expectations.
New government regulations and the impact of increased scrutiny into their operations have hit for-profit education companies such as DeVry.
They have been accused of providing poor education, saddling students with high debt while very few students graduate out of these institutions.
The federal government has clamped down on these institutions, which now have to meet stringent criteria or risk losing federal aid for students that make up a substantial portion of the revenues of these schools.
On the other side the institutes have also made admission procedures much stricter and the effect has been felt on lower enrolments.
The school's net income fell 44 percent to $32 million, or 49 cents per share, for the quarter that ended Sept. 30. That compares with $57.5 million, or 83 cents per share, a year earlier.
Its total revenue fell 7 percent to $482.7 million.
Analysts were expecting the company to earn 30 cents per share for the period on revenue of $482.5 million.
Shares of the company soared about 25% to $26.01 in Friday’s session.
It has taken some cost cutting measures as it lowered expenses through job reductions and also acquired a Brazilian institute to improve its revenues and reach.
The institute managed to cut $27 million in costs in the first quarter.