Corinthian Colleges posts $163.7-million loss
Facing sinking student enrollment and a continuing controversy over for-profit higher education, Corinthian Colleges Inc. posted a loss for its latest quarter and said it would raise tuition and cut 4% of its staff.
The Santa Ana company on Tuesday reported a $163.7-million loss for its fiscal second quarter, compared with net income of $39.4 million a year earlier. The latest figure reflected a $206-million charge against earnings.
Enrollment of new students fell 8% in the period, which ended Dec. 31, and the company predicted that new enrollments could plunge an additional 15% to 17% in the current quarter.
Corinthian attributed the enrollment drop in part to its decision last year to stop accepting the most troubled students amid a regulatory crackdown on the industry.
“Negative industry publicity and uncertainties in the regulatory environment also played a role in the decline,” Jack Massimino, Corinthian’s chairman and chief executive, said in a statement.
Federal lawmakers and educational groups have criticized Corinthian and other for-profit colleges for high student-loan default rates.
Corinthian’s shares rallied on the company’s report, suggesting that investors had feared that the results would be worse or were pleased by the move to cut costs. The shares rose 13 cents, or 2.5%, to $5.41, but remained down more than 70% since April.
In announcing the loss and job cuts, Corinthian also disclosed that Massimino could earn a bonus in the current fiscal year of as much as 115% of his base salary.
