New students, locations propel ITT profit

ITT Educational Services Inc. reported today that fourth-quarter profit shot up 18.6 percent, to $48.5 million, on rising enrollment and the opening of new locations.

The Carmel-based operator of technical schools said revenue was $230.4 million, up 11.7 percent from the year-ago period.

The $1.20 per share in profit exceeded the $1.17 anticipated by analysts surveyed by Thomson Financial.

For the 12 months, profit soared nearly 30 percent, to $151.6 million, and revenue increased 14.7 percent, to $869.5 million.

Enrollment for both new and continuing students increased about 13 percent in the fourth quarter and for the year. ITT had 53,027 students as of Dec. 31. During the year, ITT opened 10 colleges and added 246 programs.

Earlier this week, ITT said three lenders had agreed to provide federal and private education loans to students. The announcement helps provide students financing options beyond Virginia-based Sallie Mae, which is expected to halt lending to students considered subprime borrowers.

Yesterday, Sallie Mae reported it lost $1.6 billion in the fourth quarter, in part because it was setting aside $575 million to cover bad loans.

ITT CEO Kevin Modany said in today’s release that the school will hit its 2008 earnings target of $4.50 a share to $4.60 a share despite concerns over turmoil in credit markets and students’ ability to pay tuition.
ITT also disclosed that Modany will receive a $995,039 bonus for 2007.

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