LONDON - Career Education Corp. (NASDAQ:CECO) reported first-quarter earnings that fell short of Wall Street expectations, despite an increase in revenue compared to the same period last year.
The education company posted adjusted earnings per share (EPS) of $0.11, which was $0.06 below the analyst consensus of $0.17. Revenue for the quarter was $126.33 million, up 12% from the previous year but still below the consensus estimate of $132.78 million.
CECO's CEO, Todd Gleason, highlighted the quarter's achievements, stating, "We started 2024 by delivering a solid first quarter which puts us in a strong position in terms of our full year outlook."
Gleason attributed the performance to record gross margins and operational excellence programs that have advanced and diversified the company's portfolio. The backlog increased to near record levels, with a book-to-bill ratio of 1.2, and both sales and adjusted EBITDA reached first-quarter records.
Despite the revenue and EPS miss, the company reaffirmed its full-year 2024 guidance, maintaining its revenue forecast in the range of $590 to $610 million, which at the midpoint indicates an approximate 10% increase year over year (YoY).
The adjusted EBITDA guidance is also sustained at $67 to $70 million, suggesting a 20% rise YoY at the midpoint. Free cash flow is expected to be between 50% to 70% of adjusted EBITDA.
Gleason remains confident in the company's outlook for the year, citing a large sales pipeline with potential energy transition opportunities and a strong balance sheet that could support strategic acquisitions. "Our programmatic M&A process has replenished our transaction funnel with attractive, strategic, growth businesses," he added.
The company's stock movement was not disclosed, and no specific driver of the move was indicated. However, the reaffirmation of guidance suggests that CECO remains optimistic about its future performance despite the first-quarter shortfall. Investors and analysts will likely continue to monitor the company's progress towards its stated goals, particularly in the context of its strategic initiatives and potential market opportunities.
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