DeVry jumps as net income rises 34%, beating analyst estimates

DeVry Inc., the parent of DeVry University, rose the most in more than a month in New York trading, after first-quarter profit increased 34 percent.

DeVry climbed $2.98, or 7 percent, to $45.72 at 11:38 a.m. in New York Stock Exchange trading after rising as high as $46.26, the steepest climb since Sept. 24. The shares had declined 23 percent in the 12 months through yesterday.

While DeVry said new student enrollment will fall, the company may be hurt less than other for-profit education providers, said Jeff Silber, an analyst with BMO Capital Markets in New York.

“Given its diversified product offerings, the company will likely be less impacted than most others in the sector,” Silber, said in a research note today. He rates DeVry shares “market perform.”

DeVry operates nine schools, including a medical school and an online K-12 school. Its largest unit, DeVry University, has more than 90 locations in the U.S. and Canada and holds classes online.

Net income for fiscal first quarter ended Sept. 30 rose to $73.6 million, or $1.03 a share, from $54.7 million, or 76 cents, a year earlier, the Downers Grove, Illinois-based company said yesterday in a statement. That beat the 96 cents a share average of 12 analyst estimates compiled by Bloomberg.

For-profit education companies are facing increased regulatory pressure from Washington, where President Barack Obama's administration is preparing new rules governing how the colleges enlist students. Senator Tom Harkin, an Iowa Democrat, is investigating their recruitment practices, program quality and their use of government funds.

The shares of Phoenix-based Apollo Group Inc., the biggest education company, and Minneapolis-based Capella Education Co., the provider of more than 1,000 online college courses, plummeted after their financial reports.

Apollo, owner of the University of Phoenix, fell 23 percent to $38 on Oct. 14 after forecasting new student enrollment may fall more than 40 percent because of changes in recruiting practices brought about by regulatory scrutiny.

Capella declined 19 percent to $54.80 yesterday after it said enrollment growth will slow this quarter.