Capella shares leap on new enrollment gains

  • Updated: July 29, 2014 - 5:50 PM

Shares in Capella Education Co. rose 13.6 percent Tuesday after the company said new enrollment in its online university grew at the fastest rate in a year during the second quarter and forecast continued strength into autumn.

“Our strong second quarter results, coupled with our positive third quarter outlook, further increases our confidence that our strategies are on target,” Kevin Gilligan, Capella’s chairman and CEO, said in a statement.

The Minneapolis-based company said its net income fell to $9 million from $10.4 million a year ago. Accounting for one-time charges, its unaudited net income was $10.7 million. Revenue was $104.8 million, up one percent from a year ago.

Capella said its new enrollment, an indicator of future revenue and profit, rose 11 percent. That was the fastest pace since a 12.7 percent gain in the second quarter of last year.

New enrollment fell in last year’s third quarter, but executives said they expect this year it will grow about the same rate as in the just-finished period. They also said they expect total enrollment, which has been declining each quarter for several years, to grow between 1 percent and 2 percent in the July-to-September period.

Capella shares rose $7.75 to $64.91, their highest level since March.

Evan Ramstad • 612-673-4241

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