While the given problems that are plaguing Corinthian Colleges Inc. (NASDAQ:COCO) are unique to that particular for-profit school today, the underpinnings for today's 62% implosion from COCO shares are just as big of a threat to the likes of Apollo Education Group Inc. (NASDAQ:APOL), Career Education Corp. (NASDAQ:CECO), and most other for-profit education names. In fact, those woes have been well documented for a while, and showing up each company's books for almost as long. Pictures tell the grim tale for CECO, APOL, and all the rest as effectively as any words could, so let's let the images of what's going on here do most of the talking, beginning with... Career Education Corp.
As the chart of the Career Education revenue and earnings trends indicate, things have been deteriorating since 2010's peak, when a massive number of displaced and unemployed people decided to make themselves more marketable by gaining a new credential. A string of credibility problems has been digging in since then, however, pulling CECO down as much as it's pulled the company's results down.
The future doesn't look any better for CECO shareholders either. In fact, it looks worse. The pros feel Career Education is on pace to post a loss of $2.22 this year, down from the loss of $1.44 last year.
Apollo Education Group is in just as much trouble. It's on a collision course with losses within the next couple of years if things don't turn around.
And, from a fundamental as well as a socio-political perspective, it doesn't look like anything's going to change. The pros believe CECO is going to see its per-share profit slump from 2013's $3.16 to $2.33 this year.
And just for the record, it's not like Corinthian Colleges isn't in the same boat - today's alarming news is just a microcosm of the bigger, underlying problems the company as well as the industry is facing. COCO has seen its top line and bottom line faltering since 2011.
Corinthian Colleges could slip into the red at a moment's notice too... or without notice. From a per-share profit of $1.65 in 2010 to only $0.20 last year to a predicted profit of only $0.09 this year, there's little for COCO owners to look forward to, with or without today's dark cloud.
To be fair, there are some for-profit schools hanging on, offering glimmers of hope. Most of them look a little too much like Corinthian Colleges, Apollo Education Group, and Career Education, however, to say there's not a bigger, systemic problem in place that may be insurmountable. That problem, of course, is a combination of dwindling student loan support and weaker-than-touted job placements rates. It's going to take years - and maybe a complete implosion and overhaul - for the for-profit school industry to becoming investment-worthy again.
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