UES Reports $6.74-Million Loss for Fiscal 3rd Quarter

United Education & Software lost $6.74 million in its fiscal third quarter because of a decision to shed its troubled student-loan processing business.

The loss, which compared with year-earlier profit of $1.66 million, or 31 cents a share, was expected. The Encino company, which also operates a chain of trade schools, announced a month ago that it would discontinue its loan-processing operation and post a substantial loss for the quarter that ended Oct. 31.

UES took the action to settle a dispute with the California Student Loan Finance Corp. and Bank of America. The dispute stemmed from problems United Education had servicing student loans. UES serviced $1 billion in guaranteed student loans for the CSLFC, a nonprofit company that buys the loans from banks and other institutions that issue them. Bank of America is the trustee of CSLFC-issued bonds.

In addition to a $6.49-million loss from the discontinued lines, UES lost $254,000 from its continuing operations in the third quarter. United Education’s third-quarter revenue rose to $19.8 million from $18.9 million.

However, in a statement announcing the results, UES President Aaron Cohen predicted that the company would again be profitable in its fiscal fourth quarter.

For the first 9 months of its fiscal year, UES lost $4.47 million compared with year-earlier profit of $2.89 million, or 55 cents a share. Nine-month revenue climbed to $62 million from $47.8 million.