Corinthian Colleges moves to 2Q profit

Corinthian Colleges Inc. said Wednesday that it returned to a profit in its fiscal second quarter as it slashed expenses in the face of slowing enrollment. The results trumped Wall Street's expectations, and the company's shares rose more than 30 percent in morning trading. Corinthian, which operates campuses under the names Everest, Heald and WyoTech, reported net income of $1.8 million, or 2 cents a share, for the three months that ended Dec. 31. That compares with a loss of $163.7 million, or $1.94 a share, a year earlier, when it reported $206 million in severance charges. Excluding severance costs and other one-time items from both this year's second quarter and last year's, Corinthian's earnings amounted to 4 cents a share, compared with adjusted earnings of 23 cents per share in the second quarter last year, the company said. Analysts polled by FactSet expected adjusted earnings of a penny a share. Revenue for the latest quarter slipped almost 14 percent to $415.5 million but was in line with analysts' average forecast for $415.3 million. Corinthian has cut its operating expenses by about $150 million over the past 18 months to help offset a decline in student enrollment, which fell almost 10 percent to 94,860 on Dec. 31, compared with 105,210 a year earlier. The company's quarterly expenses for educational services, marketing and admissions and general and administrative functions all declined. Management said new student enrollment declines slowed in the quarter, in part because of growth at Everest University Online. Quarterly new student enrollment fell 3 percent to 25,951 from 26,758, and the company expects it to rise slightly in the second half, which began Jan. 1. For the current quarter, Corinthian expects adjusted earnings of 15 cents to 17 cents per share and revenue of $430 million to $440 million. For the year, it anticipates earning 30 cents to 33 cents per share. Analysts expect third-quarter adjusted earnings of 13 cents a share and revenue of $424.8 million and full-year earnings of 23 cents a share and revenue of $1.67 billion, according to FactSet. Corinthian shares jumped 95 cents, or 31.47 percent, to $3.98 by midday. The stock has traded in a range of $1.24 to $5.61 over the past 52 weeks.