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Enrollment, profit fall at ITT Educational

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ITT Educational Services Inc. signed up fewer students and saw fewer profits in the first quarter, but it still beat the expectations of Wall Street analysts.

The Carmel-based operator of for-profit colleges earned $85.4 million in the three months ended March 31, a 2.4-percent decline from the same quarter a year ago.

But ITT has boosted its earnings per share by buying back shares, including 2 million in the first quarter and more than 6 million in the last year.

That allowed the company to post earnings per share of $2.91, an increase from $2.46 in the same quarter last year.

Analysts surveyed by Thomson Reuters were expected earnings per share of $2.54 in the most recent quarter.

Enrollment of new students in the quarter fell 5.6 percent compared with the same period last year, to 21,761. Overall, ITT’s enrollment slipped 0.6 percent, to 84,030.

Fewer students contributed to a slight dip in revenue of 0.2 percent, for a quarterly total of $383.2 million. Analysts were expected revenue of $383.7 million.

Enrollment has been declining at for-profit colleges after the U.S. Education Department increased restrictions on recruiting. Beginning this year, the Obama administration will require for-profit colleges to ensure that at least 45 percent of former students are paying down their loans beginning four years after leaving school.

If schools’ former students fail to achieve that threshold, the government will not allow a for-profit education program to get student-loan funding to raise its enrollment levels. And if repayment rates fall below 35 percent, the government would cut off student-loan funding entirely for any new students.

Since the Obama administration announced the details of those new rules in July, ITT’s shares have lost a quarter of their value. They closed Wednesday at $66.05 apiece.

ITT stock surged by as much as 9 percent in morning trading. Shares traded at $68.79 each, up 4.2 percent, at midday.

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  • Lobster Dinner
    It's the Youngstown way of doing things
  • Lobster Dinner?
    Please let me know which ITT Financial Aid Office is getting lobster dinners because we certainly are not getting them at the ITT Financial Aid Office I work in. I think I need to transfer to that office instead of getting the leftovers from the student appreciation pizzas.
    • do not go there
      Do NOT pay over $400 a credit hour at ITT. There are more affordable options out there. IUPUI is at about $241 a credit hour, Ivy Tech is like $100 to $200 a credit hour.. take the credit hour and times it by 3cr hr. an average class is 3 credit hours... please stop and consider options. for an undergrad degree, you are only aloud a max of $57,000. you will max out and not even have a degree at ITT. It is not worth the money, trust me I went there and wasted a whole year, and couldnt even transfer my credits... :(
    • lack of equipment
      I go here. They say it's education for the future? We are using old outdated software and out we have to use our teacher's own personal camera for film and video production class. ITT allows the Financial Aid department to have Lobster dinner that cost $715!

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      1. Apologies for the wall of text. I promise I had this nicely formatted in paragraphs in Notepad before pasting here.

      2. I believe that is incorrect Sir, the people's tax-dollars are NOT paying for the companies investment. Without the tax-break the company would be paying an ADDITIONAL $11.1 million in taxes ON TOP of their $22.5 Million investment (Building + IT), for a total of $33.6M or a 50% tax rate. Also, the article does not specify what the total taxes were BEFORE the break. Usually such a corporate tax-break is a 'discount' not a 100% wavier of tax obligations. For sake of example lets say the original taxes added up to $30M over 10 years. $12.5M, New Building $10.0M, IT infrastructure $30.0M, Total Taxes (Example Number) == $52.5M ININ's Cost - $1.8M /10 years, Tax Break (Building) - $0.75M /10 years, Tax Break (IT Infrastructure) - $8.6M /2 years, Tax Breaks (against Hiring Commitment: 430 new jobs /2 years) == 11.5M Possible tax breaks. ININ TOTAL COST: $41M Even if you assume a 100% break, change the '30.0M' to '11.5M' and you can see the Company will be paying a minimum of $22.5, out-of-pocket for their capital-investment - NOT the tax-payers. Also note, much of this money is being spent locally in Indiana and it is creating 430 jobs in your city. I admit I'm a little unclear which tax-breaks are allocated to exactly which expenses. Clearly this is all oversimplified but I think we have both made our points! :) Sorry for the long post.

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      5. It is sad to see these races not have a full attendance. The Indy Car races are so much more exciting than Nascar. It seems to me the commenters here are still a little upset with Tony George from a move he made 20 years ago. It was his decision to make, not yours. He lost his position over it. But I believe the problem in all pro sports is the escalating price of admission. In todays economy, people have to pay much more for food and gas. The average fan cannot attend many events anymore. It's gotten priced out of most peoples budgets.

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