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Apollo Group Inc. Reports Operating Results (10-Q)

June 25, 2012 | About:
10qk

10qk

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Apollo Group Inc. (APOL) filed Quarterly Report for the period ended 2012-05-31.

Apollo Group Inc has a market cap of $4.03 billion; its shares were traded at around $34.9 with a P/E ratio of 7.8 and P/S ratio of 0.9. Apollo Group Inc had an annual average earning growth of 21.9% over the past 10 years. GuruFocus rated Apollo Group Inc the business predictability rank of 5-star.

Highlight of Business Operations:

Our net revenue decreased $105.0 million, or 8.5%, in the third quarter of fiscal year 2012 compared to the third quarter of fiscal year 2011. The decrease was primarily attributable to University of Phoenix s 9.1% decrease in net revenue principally due to lower University of Phoenix enrollment, partially offset by selective tuition price and other fee changes. See further discussion of net revenue by reportable segment at Analysis of Operating Results by Reportable Segment.

Depreciation and amortization increased $4.0 million, or 9.8%, in the third quarter of fiscal year 2012 compared to the third quarter of fiscal year 2011, which represents a 70 basis point increase as a percentage of net revenue. The increase was principally attributable to $3.1 million of intangible asset amortization in the third quarter of fiscal year 2012 as a result of the Carnegie Learning acquisition, and increased capital expenditures and capital leases in recent years primarily related to information technology. The increase was partially offset by a decrease in amortization of BPP intangible assets.

Our net revenue decreased $331.9 million, or 9.2%, in the first nine months of fiscal year 2012 compared to the first nine months of fiscal year 2011. The decrease was primarily attributable to University of Phoenix s 9.7% decrease in net revenue principally due to lower University of Phoenix enrollment, partially offset by selective tuition price and other fee changes. See further discussion of net revenue by reportable segment at Analysis of Operating Results by Reportable Segment.

Depreciation and amortization increased $16.1 million, or 13.7%, in the first nine months of fiscal year 2012 compared to the first nine months of fiscal year 2011, which represents an 80 basis point increase as a percentage of net revenue. The increase was principally attributable to increased capital expenditures and capital leases in recent years primarily related to information technology, and $8.9 million of intangible asset amortization in the first nine months of fiscal year 2012 as a result of the Carnegie Learning acquisition. The increase was partially offset by a decrease in amortization of BPP intangible assets and the absence of depreciation of office buildings for which we entered into a sale-leaseback arrangement in the third quarter of fiscal year 2011. Refer to Three months ended May 31, 2012 compared to the three months ended May 31, 2011 above for the estimated future amortization of our aggregate finite-lived intangible assets.

Apollo Global net revenue decreased $2.7 million in the first nine months of fiscal year 2012 compared to the first nine months of fiscal year 2011 primarily due to the unfavorable impact of foreign exchange rates and lower enrollment at UNIACC. The decreased operating loss was due to the BPP $219.9 million goodwill and other intangibles impairment charge in the second quarter of fiscal year 2011. The decrease was also partially due to lower intangible asset amortization at BPP in fiscal year 2012. These two factors were partially offset by UNIACC s $16.8 million goodwill and other intangibles impairment in fiscal year 2012, along with increased costs during the first nine months of fiscal year 2012 associated with initiatives at BPP to expand and enhance certain educational offerings, particularly at BPP University College.

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