After the close Tuesday, education firm Apollo Group (NASDAQ: APOL) reported stronger-than-expected quarterly earnings. Despite the strong results, the stock dropped in post-market trade, shedding 6% to trade in the $73 region. APOL's second-quarter earnings came in at 77 cents per share, far better than the loss of 19 cents per share a year ago. Quarterly revenue increased 26% to $876.1 million. The results also easily eclipsed analysts' expectations for earnings of 65 cents per share. APOL CEO Chas Edelstein noted, "we are pleased with the growth in revenue and enrollments in our second quarter and we believe we are continuing to benefit from investments we are making in key academic and operational areas."
So, why the after-hours drop? Credit Suisse analyst Kelly Flynn believes it was caused by "confusion about the litigation charge mentioned in the press release." Apparently, this charge was taken last year and is not relevant to the latest quarter.
Technically, the shares have marched forward since the middle of March and are currently battling overhead resistance in the $80 region, but it appears that there is a measure of support in place at the $75 level. If the stock can weather the storm of misunderstanding that some believe sent it lower last night, we could see the strong earnings bolster confidence and attract more investors.
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Reader Comments (Page 1 of 1)
4-01-2009 @ 12:14PM
TFN said...
The belief that many of the newly unemployed would return to school helped shares of Apollo Group stay ahead of the averages but now investors are wondering if they may have been overzealous. Today's report shows many of those investors were expecting too much and overpaid for their shares. Wait until the end of the week (after Friday's unemployment figures) and start thinking about grabbing a few shares on the cheap. Last quarter's growth report could create the kind of momentum Apollo needs to get its share price moving in a positive direction for many months to come. http://www.todaysfinancialnews.com/us-stocks-and-markets/apollo-group-not-so-hot-for-teacher-8465.html