Why Shares of Career Education Corp. Popped

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 Career Education Corp.  were looking smarter today, gaining as much as 19% after its fourth-quarter earnings report beat expectations.

So what: It was not exactly a strong quarter for the for-profit educator, but it topped estimates on both the top and bottom lines, posting a per-share loss of $0.29 against the consensus of $0.49, while revenue slipped 18.5% to $247.1 million, ahead of expectations at $241.44 million. Both new-student and overall enrollment declined 16%, but the company did see improvements in some areas, with new-student enrollment growth in three of its schools and a 49% jump in its conversion rate of prospective students to new students. 


Now what: CEO Scott Steffey said Career Education had made "solid operational progress in the turnaround of the company," adding that "early results in 2014 are encouraging." The stock nearly doubled last October after the company sold its European assets, and it seems to be making progress with its cost equation, having narrowed its adjusted loss from a year ago. Still, with double-digit enrollment declines and further losses expected, it's hard to find a reason to cheer Career Education. 

Stocks you can rest easy with
If Career Education Corp. is causing you to lose sleep, it's time to switch your investing strategy. It's no secret that investors tend to be impatient with the market, but the best investment strategy is to buy shares in solid businesses and keep them for the long term. In the special free report "3 Stocks That Will Help You Retire Rich," The Motley Fool shares investment ideas and strategies that could help you build wealth for years to come. Click here to grab your free copy today.

The article Why Shares of Career Education Corp. Popped originally appeared on Fool.com.

Jeremy Bowman has no position in any stocks mentioned, and neither does The Motley Fool. Try any of our Foolish newsletter services free for 30 days. We Fools may not 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 - 2014 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.


Increase your money and finance knowledge from home

Goal Setting

Want to succeed? Then you need goals!

View Course »

Introduction to ETFs

The basics of Exchange Traded Funds and why ETFs are hot.

View Course »

Add a Comment

*0 / 3000 Character Maximum