MINNEAPOLIS (AP) — Capella Education Co. shares fell in Tuesday trading after the online education company reported a drop in fourth-quarter revenue and profit due to lower enrollments.
The company operates Capella University and, along with the rest of the for-profit education industry, has struggled with the impact of new regulations, increased scrutiny from the government and a weak economy. Capella has invested more in marketing to attract students and has changed policies to meet stricter federal guidelines to keep getting student loan funding.
Capella said that total active enrollment fell 3.6 percent in the fourth quarter to 36,329 students, while new enrollment increased by 0.6 percent. The company said that new enrollment is expected to be up 5 percent in the current quarter but total enrollment will be down by 3 to 4 percent.
Net income was $8.6 million, or 68 cents per share, for the period that ended Dec. 31. That compares with $12.1 million, or 85 cents per share, in the same quarter a year ago.
Revenue fell by 2.7 percent to $107 million.
Capella expects revenue to decline by 4.5 to 5.5 percent in the current quarter, with shrinking margins due to lower enrollments.
Shares fell 59 cents to $31.42 in afternoon trading. The stock has traded in a 52-week range of $25.81 to $44.71.