Apollo shares up on better-than-expected Q3 results
June 30 (Reuters) - Shares of Apollo Group Inc (APOL.O: Cotización) rose nearly 10 percent Tuesday, a day after the for-profit education provider posted quarterly results above market expectations, helped by an increase in degreed enrollment.
The company posted a 45 percent increase in third-quarter profit, boosted by a 22 percent rise in degreed enrollment, which touched 420,700 during the quarter, as well as improved student retention at University of Phoenix.
Robert W. Baird raised its price target on the company's stock to $76 from $68, and increased its fiscal 2009 earnings per share estimate to $4.21 from $3.91, encouraged by solid fundamentals in Apollo's third-quarter results.
However, Baird analyst Amy Junker maintained her "neutral" rating on the stock on sector-wide concerns.
"We continue to expect that post-secondary education stocks will be range bound given expectations for decelerating trends over the next several quarters and headline risks surrounding potential regulatory changes," Junker said in a note to clients.
Oppenheimer analyst Scott Schneeberger also raised his fiscal 2009 earnings per share outlook on the company to $4.18 from $3.94 and for fiscal 2010 to $5.00 from $4.62, but said investors will tread cautiously until the impact of regulatory changes is clearer.
"Apollo is exhibiting solid bottom line results and continued momentum as unemployment continues to rise and accessibility to student loans does not appear to be an issue," Schneeberger said in a note.
Shares of the company were up 9 percent at $72.17 in morning trade on Nasdaq. They touched a high of $72.50 earlier in the session.
The S&P 500 Education Services Sub-Industry Index .GSPEDUS rose 8.1 percent to 99.52 points Tuesday morning. (Reporting by Eric Yep in Bangalore; Editing by Aradhana Aravindan)
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