Capella continues to face financial challenges

  • Article by: JANET MOORE
  • Star Tribune
  • April 24, 2012 - 8:53 AM

Capella Education Co. said first-quarter earnings declined in a "challenging market environment."

The Minneapolis-based for-profit online education company said earnings for the quarter ended March 31 decreased to $11.3 million, or 82 cents a share, from $14.6 million, or 90 cents a share, the same period a year ago.

Wall Street analysts were expecting Capella to earn 78 cents a share.

Sales in the quarter decreased 1.8 percent to $109 million.

Capella Chairman and CEO Kevin Gilligan said in a statement the company's focus "remains on building Capella for long-term sustainable growth" through a new marketing strategy and investments in innovation to "drive differentiation and learner success."

Capella also updated its revenue outlook for the second quarter, saying it will decline 1 percent to 2 percent. Total enrollment is also expected to decline by 6 percent to 7 percent when compared with the same period of 2011.

Capella has struggled due to a weakened economy, increased competition and new federal regulations related to high student loan debt.

Janet Moore • 612-673-7752

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