Career Education Corp. profit down

For-profit U.S. education company Career Education Corp. on Monday reported a lower-than-expected profit due partly to more students shifting to lower-tuition degree programs and faster growth of lower-margin online operations.

Net income in the third quarter fell almost 25 percent to $15.6 million, or 17 cents a share, compared with $20.7 million, or 22 cents a share, a year earlier.

Excluding discontinued operations, the Hoffman Estates-based company earned 21 cents a share, two cents below what analysts polled by Reuters Estimates had expected.

The company said profit margins fell for a number of reasons, including: more students shifting to the university segment's associate degree program instead of the higher margin bachelor's degree program; faster growth of Colorado Technical University Online, which has historically had lower margins than that of American InterContinental University Online; and increased expenses for its start-up campuses.

Revenue fell 5.6 percent from last year to $404.4 million, below the $409.6 million analysts had expected.

Career Education said during the third quarter it continued sale negotiations with interested parties over the 11 schools and campuses the company currently has up for sale.

Career Education said during the fourth quarter it would examine other options for these schools, including selling the sale of individual schools instead of auctioning them off in a group.