Earnings Preview: UTI - Analyst Blog
25 Novembre 2011 - 5:58PM
Zacks
Universal Technical Institute Inc. (UTI), which
provides professional automotive, diesel, collision repair,
motorcycle and marine programs, is slated to report its
fourth-quarter 2011 financial results after the bell on Tuesday,
November 29. The current Zacks Consensus Estimate for the quarter
is 28 cents a share. The Zacks Consensus estimates revenue at $111
million.
Third-Quarter 2011, a Synopsis
Universal Technical posted better-than-expected third-quarter
2011 results. The quarterly earnings of 27 cents a share topped the
Zacks Consensus Estimate of 21 cents, and climbed 8% from 25 cents
earned in the prior-year quarter.
Net revenue for the quarter climbed 1.3% to $108.9 million from
the prior-year quarter, and came ahead of the Zacks Consensus
Estimate of $105 million. The increase in revenue reflects a rise
in tuition fees, partially offset by fall in average undergraduate
full-time student enrollment.
Fourth-Quarter 2011 Consensus
The analysts polled by Zacks, expect Universal Technical to post
fourth-quarter 2011 earnings of 28 cents a share. The current Zacks
Consensus Estimate reflects a decline of 3.4% from the prior-year
quarter. The estimates in the current Zacks Consensus for the
quarter range from a low of 25 cents to a high of 33 cents.
Zacks Agreement & Magnitude
Of the 8 analysts following the stock, none moved up or down in
the last 30 or 7 days, thereby keeping the Zacks Consensus Estimate
unchanged at 28 cents.
Mixed Earnings Surprise History
With respect to earnings surprises, Universal Technical has
topped as well as missed the Zacks Consensus Estimate over the last
four quarters in the range of negative 25.6% to positive 28.6%. The
average remains at positive 3.9%. This suggests that Universal
Technical has beaten the Zacks Consensus Estimate by an average of
3.9% in the trailing four quarters.
Price Stats
Since its last earnings release on July 27, 2011, Universal
Technical’s market price has plunged 32.6% to $12.34 on November
23, 2011. During trading hours on November 23, the stock reached
the day low of $12.28 and the day high of $13.00.
The stock price is within the range of the 52-week low-high
range of $12.28 attained on November 23, 2011 and $22.50 achieved
on January 3, 2011. Over the period from July 27, 2011 to November
23, 2011, the stock dropped to a low of $12.28 on November 23, 2011
and rose to a high of $18.91 on July 27, 2011.
Let’s Conclude
Universal Technical is witnessing a fall in students’
enrollment. After increasing 3.3% in the second quarter of 2011,
the company informed that average undergraduate full-time student
enrollment dropped 3.8% in the third quarter. Moreover, student
starts for the quarter plummeted 32.5%. The company cautioned
that enrollment of new students for the fourth quarter and fiscal
2011 will be below the prior-year periods, which would result in a
low single-digit revenue growth for the year.
The regulation proposed by the Department of Education is
weighing upon student enrollments.
The Department of Education proposed that an educational program
could only qualify for Title IV funds, if it helps in achieving
gainful employment, which includes the criteria of loan repayment
rate and debt-to-income ratios. The company derives a major portion
of its revenues from federal student financial aid programs, the
Title IV programs. The education institutions are also under the
scanner due to the rise in the default rate of student loans.
Currently, we have a long-term Underperform rating on the stock.
However, Universal Technical, which competes with
Corinthian Colleges Inc. (COCO), holds a Zacks #3
Rank that translates into a short-term Hold recommendation.
CORINTHIAN COL (COCO): Free Stock Analysis Report
UNIVL TECH INST (UTI): Free Stock Analysis Report
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