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Quarterly profit up 53% for Grand Canyon University's parent

05/08/2012

AZCentral.com, May 7, 2012, by Jahna Berry

Buoyed a strong wave of new students, the parent of Grand Canyon University reported a 53 percent bump in quarterly profits and projected that the Phoenix-based education company could pull in more revenue than expected this year.

The news comes after reports that other Arizona education companies, including Universal Technical Institute and University of Phoenix parent Apollo Group, have struggled to attract new students.

New federal rules for for-profit schools and ripple effects from the lingering economic downturn have put downward pressure on enrollment at those schools.

Grand Canyon Education Inc. reported financial results Monday for the three months that ended March 31. During that period, overall enrollment for the school grew 8.9 percent. At the end of March, Grand Canyon had 41,229 online students and 5,049 students who took classes at its traditional campus in Phoenix.

"Our new starts for the quarter are up again with new enrollment growing double-digit on a year-over-year basis," Brian Mueller chief executive officer, said during a call with analysts.

Unlike other education companies, Grand Canyon does not report specific new-student figures.

"We expect the trend of year-over-year enrollment to continue," Mueller added.

Grand Canyon's profit surged 53 percent, to $14.5 million, or 32 cents per diluted share, during the first three months of the year. In 2011, that figure was $9.5 million, or 21 cents per diluted share.

The company also expects to end the year with a more robust balance sheet.

Grand Canyon Education expects to earn net revenue of $478 million to $486 million. Earlier, the company had predicted that it would end the year with net revenue of $472 million to $482 million.

The company is well-positioned for future growth, Mueller said, but Grand Canyon will face more rivals.

"It's also clear that a lot of traditional universities are replacing lost tax revenue and declining donations with adult- student tuition revenues, making the overall higher-education environment more competitive, especially for good students," he said.