For-profit education company Career Education Corporation (NASDAQ: CECO) seems to have put most of its ethical and regulatory problems behind it, and is now trying to repair the damage. CEO Gary McCullough insists that 3Q 2007 numbers are "positive indicators for future performance." That's good, because the current numbers are flunking.
Career Education's problem is not just a set of numbers heading in the wrong direction. Like many for-profit educational services providers, Career Education markets its programs to online students. Many online programs are cheaper to run than bricks and mortar campuses. Career Education has an increasing online enrollment, but operates online programs at a lower overall profit margin. The more online students, the lower the profit per student, therefore the bigger the decline in revenue. Online income dropped $15.3 million in 3Q 2007 alone. The drop in online income is the major factor in the YTD $200 million decline in consolidated revenue.
Career Education is currently negotiating the sale of 11 schools and campuses and has recorded a $4.3 million loss from discontinued operations as a result. The company has reduced capital expenditures by 25%, and taken steps to trim administrative, admissions and bad debt expenses. The company repurchased $150 million of its stock in 3Q 2007, part of a much larger $800 million buyback. There are a variety of for-profit educational equities capable of earning a passing grade from investors. Career Education presently is not one of them.
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Reader Comments (Page 1 of 1)
12-03-2007 @ 2:54AM
Charles said...
CEC offers a chop shop education and it doesn't look like they are doing much to fix it. CEC schools are losing credibility in the career setting and the educational world. CEC isn't educating students for the real world and have lied on many
occasions about job placement and graduation percentage. They have been investigated and sued but nothing seems to correct their bamboozling practices.
CEC administration is continuously lying to students and it will have repercussions that hopefully will bankrupt CEC and (CECO) stocks will plummet for permanent elimination of a large For-Profit Corperation.
I have created CEC Advocacy Groups that inform the truth of CEC programs.
Facebook: http://academy.facebook.com/group.php?gid=5604847490
Myspace:
http://groups.myspace.com/Theiadttruthadvocate
12-05-2007 @ 12:35AM
Charles said...
CEC (CECO) is a corporation that owns for-profit postsecondary teaching institutions. CEC is a deceptive and misleading corporation that has been in turmoil in the past and from recent reports doesn't seem to have cleaned up it's act.
After much controversy CEC recently retained Gary E. McCullough as their President & CEO. Gary is going to have a mounting of issues regarding many lawsuits, active investigations by the Educational Department, Federal Government and news investigation teams to conquer before a rebound is noticeable.
CEC has existing issues with accrediting councils at many of it's campuses with countless on probation which renders the accreditation useless. The situation is only going to get worse with the mounting of past & current students speaking against CEC.
Here is the CBS 60 Minute investigation:
http://www.cbsnews.com/stories/2005/01/31/60minutes/main670479.shtml
I have also created active groups and expose CEC and the escalating number of negative reports by past & current students and reports from the actual faculty.
Facebook: http://academy.facebook.com/group.php?gid=5604847490
Myspace: http://groups.myspace.com/Theiadttruthadvocate
Once a NYSE darling seems to be on a uncontainable downward spiral.
Charles