Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of University of Phoenix-parent Apollo Group were getting an "A" from investors today, gaining as much as 15% after beating estimates in its quarterly earnings report.

So what: By its own standards, this was not a good quarter for the for-profit educator, as net income dropped 79% from a year ago, but with adjustments for one-time charges earnings per share came at $0.34, down from $0.51 a year ago, but much better than the $0.19 analysts had expected. Other key numbers were also moving in the wrong direction. Overall enrollment was down 15% and new student enrollment, generally seen as the lifeblood of the industry, was down 20%. Revenue also fell 13% to $838.4 million.


Now what: While an earnings beat generally sends shares up, the trend is the key thing to watch here. Enrollments continue to fall at for-profit colleges, taking revenue and profits with them. Public opinion on these schools seems to have shifted, and the federal government's scrutiny has also hampered the sector, which often leaves students saddled with debt they can't pay back. I'd wait for those trends to reverse before getting invested.

Want more on Apollo Group? Add the company to your Watchlist by clicking right here.

The article Why Apollo Group Shares Jumped originally appeared on Fool.com.

Fool contributor Jeremy Bowman and The Motley Fool have no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Copyright © 1995 - 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.


Increase your money and finance knowledge from home

Understanding Stock Market Indexes

What does it mean when people say "the market is up 2%"?

View Course »

Professional Vs Do it Yourself Investing

Should you get advice or DYI?

View Course »

Add a Comment

*0 / 3000 Character Maximum