DeVry Scores Well in Second Quarter

Posted Jan 27th 2010 11:40AM by Tom Taulli
Filed under: Earnings Reports

DeVry (DV), which is a major provider of private education services, continues to learn how to thrive. For the latest quarter, revenues increased 28% to $473 million and earnings came to $72.5 million, or $1.00 per share. The consensus was for revenues of $465.1 million and profits of $0.83 per share.

The main growth driver was enrollments, which increased by 23%. Although, there was weaknesses in some businesses, such as the Becker division (which provides training for CPAs).

Despite this, DeVry's prospects look strong for the year, whether or not the economy improves. A key reason is that the company has a diversified platform of offerings. For example, there is a school for nursing and the veterinary profession (both which are counter cyclical). Actually, DeVry considers itself a "career university," which is certainly a good thing to be in tough times.

What's more, DeVry has the resources to continue to invest in its business. In fact, the company plans to spend $100 million in 2010 to improve its program and facilities.

At the same time, DeVry is benefiting from its cost-efficient model. The expectation is that operating margins will exceed 17.1% (which is the historical peak).

In Wednesday morning trading, the shares of DeVry were up 6% to $59.39.

Tom Taulli advises on business tax preparation and resolving tax problems. He is also the author of a variety of books, including The Complete M&A Handbook. His website is at Taulli.com.

Tags: Devry, DV, earnings, inthenews