For-Profit DeVry Blames New Regulations For a 90% Drop In Net Income
graphic via Colorlines
Oh man, it sucks being a blood sucking for-profit "university" in the business of cranking out graduates with no real job prospects and lots of debt, doesn't it?
DeVry said last Thursday that its net income dropped by 90 percent in its fiscal second quarter due to recent Department of Education regulations put in place last summer.
For the quarter ending December 31st, DeVry earned a measly $9 million (13 cents per share) compared to $89 million ($1.25 per share) a year previous.
DeVry's Cohort Default Rate (CDR) hit 10.1 in 2009, forcing it out of exempt status as far as the Department of Education is concerned. As we all know, it's hard to pay back those outrageous student loans if you have no job with which to pay them. DeVry must maintain a consecutive three-year term of below 10% default to regain its exempt status, and will be on a short Federal Stafford loan leash until that occurs.
According to MarketWatch, DeVry's board raised the annual dividend 25% last November and authorized a share buyback valued at $100 million, or about 4% of the company's market value at the time. Chief Executive Daniel Hamburger said the moves reflected the company's strong financial position and belief in its long-term opportunities.
Apparently, DeVry tried to laugh off its depressing Q2, blaming it on deteriorating economic conditions and rising unemployment. Now, JDA is the first one to insist economic conditions are deteriorating but really?! That's the problem, DeVry? I heard unemployment had actually improved a tad, did I read that wrong?
Pro tip: "life" can teach you more than a for-profit school for 100% less than said for-profit school if you do it right.
Disclosure: I do not own nor do I intend to EVER buy any shares of DV. I did, in a previous life, work for a private company in direct competition with a unit of DeVry but have long since cut ties with said private company and maintain no material interest in the success or failure of its competitors.