The Apollo Education Group, parent company to the University of Phoenix system, has announced a loss of $33.6 million on its quarterly financial report.
The company said the loss, which comes to about 31 cents per share, took place over a three-month period which ended on February 28, which reverses a profit of $14.6 million, or 13 cents a share, occurring in the year-earlier period. As fewer students have enrolled in the system, revenue has dropped from $673 million down to $579 million.
The company said the drop in enrollment is due to increased competition from universities and other education companies in addition to tougher regulations.
The loss came above the expected 16 cents shortfall predicted by analysts. Revenues also came in below what was expected.
The release of the report in turn caused investors to push down Apollo’s stock by $7.95 per share, or 28.4%, with shares reaching a closing price of $20.04. Apollo’s value has dropped by 41% since the beginning of 2015.
While chief executive officer Greg Cappelli did say the company is facing a number of challenges, he added that he feels that management has a solid long-term plan to help the company through.
“While we faced challenges in the second quarter, we believe Apollo Education Group has the right long-term strategy in place. In a time of unprecedented change in the higher education industry, we are focused on enhancing outcomes through a deep understanding of student and employer needs. This includes differentiating University of Phoenix through its program-based colleges and diversifying our organization with the expansion of Apollo Global and other targeted growth initiatives. We are aligning education to careers, offering students tangible skills and helping employers develop a high-performance workforce.”
However, the fall of Apollo comes as another sign of the decline of for-profit education. Just last July, former competitor Corinthian Colleges closed its doors. Prior to that, the University of Phoenix closed 115 of its campus locations.
For-profit education companies continue to struggle to rise above the increasing criticism that the education received from these schools are of low quality and at too high a cost.
While the companies only enroll about 12% of all college students across the country, the students who attend for-profit schools tend to account for around 50% of student loan defaults.
Apollo recently noted that default rates at the University of Phoenix have declined over the past few years.