Career Edu Corp has a market cap of $484.2 million; its shares were traded at around $7 with a P/E ratio of 3.2 and P/S ratio of 0.3. Career Edu Corp had an annual average earning growth of 9.4% over the past 10 years.
Highlight of Business Operations:The impact of the factors noted above has been most notably felt within our domestic career institutions who collectively reported a thirty four percent decline in new student starts in the first quarter 2012 as compared to the prior year quarter. On a consolidated basis, the twenty-seven percent decline in new student starts coupled with a decline in average student population as compared to the prior year quarter resulted in an 18.3% decline in total revenue as compared to the prior year quarter. Operating income declined approximately $62.2 million as compared to the prior year quarter resulting from the decline in revenue. Our domestic career schools first quarter 2012 operating results as compared to the prior year quarter declined $48.5 million. A great deal of change and investment has been made into these schools, and as such, we currently anticipate that the combined groups operating loss for 2012 will be between $100 and $120 million, excluding the impact of possible impairments, legal settlements and other unusual items.
Current quarter operating income decreased $17.2 million as compared to the prior year quarter. Operating margin declined from 30.7% to 19.1% resulting from the decrease in revenue without a corresponding decrease in operating expenses. During the first quarter of 2012, CTU launched its new brand campaign which resulted in an additional $4.0 million of advertising expense as compared to the prior year quarter.
The current year quarter resulted in an operating loss of $11.8 million, as compared to operating income of $11.6 million in the prior year quarter. The decrease in revenue was only partially offset with a decrease in overall operating expenses. The first quarter of 2012 included approximately $1.3 million in severance expense related to the decision to centralize certain functions into our existing shared services organization, including financial aid and certain admissions processes.
Operating income increased $3.4 million, or 34.5% as compared to the prior year quarter. The increase in revenue was partially offset with higher operating expenses, primarily academic expenses. The increase in academic expenses is driven by increased student population, as well as continued investments being made at certain institutions within INSEEC Group as we prepare to seek internationally recognized programmatic accreditation. Operating income was negatively impacted by $0.6 million due to unfavorable foreign currency exchange rates.
Capital Expenditures. Capital expenditures decreased $11.5 million, or 48.3% from $23.8 million during the quarter ended March 31, 2011, to $12.3 million during the quarter ended March 31, 2012. Capital expenditures represented 2.8% and 4.4% of total revenue of continuing and discontinued operations during the quarters ended March 31, 2012 and 2011, respectively. Capital expenditures were higher in the prior year due to the increased investment related to opening our new campus support center, as well as higher expenditures within our Health Education segment.
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