Laureate shares dip on projection for profits in 3Q

July 22, 2005|By Blanca Torres | Blanca Torres,SUN STAFF

Shares in Laureate Education Inc., the Baltimore-based company that runs for-profit online and international universities, fell nearly 7 percent yesterday after it projected third-quarter profits well below analysts' expectations and said its chief financial officer has resigned.

Sean R. Creamer, the CFO, accepted a job from a technology company that will allow him to travel less for work, said company spokesman Chris Symanoskie. Creamer spent about a third of his work time on the road, Symanoskie said.

Second-quarter profits decreased to $19.8 million from $20.8 million, even though revenue rose 38 percent to $218 million. Earnings per share during the quarter were 43 cents, compared with 50 cents during the second quarter of 2004. The profit decline occurred because Laureate received about $13 million less in interest income last quarter than in the 2004 period, Symanoskie said.

Laureate predicted that its third-quarter earnings will be 21 to 23 cents per share, well below analysts' consensus estimates of 33 cents as reported by Thomson Financial Analysts did not take into account seasonal revenue fluctuations during the third quarter, Symanoskie said.

Most of the company's revenue comes in during the second and fourth quarters since that is when most schools are in session. The majority of Laureate's students pay tuition monthly, Symanoskie said.

The company's stock dropped $3.33, or 6.9 percent, to close at $44.92 yesterday on the Nasdaq stock market.

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