The Training-For-Profit Model – at risk?

Uncategorized 0 Comment 2

DeVry LogoWhenever news articles address the “for-profit” verses the “not-for-profit” business models for any industry, I always cringe, because I think most people don’t understand the difference.  The “not-for-profit” model can be managed and led by an executive leadership with salaries well into six figures and higher.  “Not-for-profit” organizations do not necessarily operate on shoe-string budgets.  They simply do not post a “profit” over and above whatever other monies they may pay out.  And there are other restrictions too.

So when you hear about the training industry’s “for-profit” companies, don’t be tempted to shout “aha!  Greedy jerks!  They should be not-for-profit like their more charitable counterparts”, because those counterparts aren’t necessarily as charitable as you might think.

But that aside, there’s no question that there’s been a good amount of invester interest in the “for-profit” training models over the past few years of companies like DeVry.

That’s why a lot of investors got worried when DeVry posted earnings that failed to meet expectations in July of last year. [1]Those earnings jumped back up in October. [2]

So which way is the industry going?  Forbes Magazine published a report a few days ago looking at a competitor and well known for-profit education, Apollo Group, stating that “[a]nalysts expect decreased profit for Apollo Group”. [3]

Something to watch as the year progresses.

Footnotes

[1] http://www.cnbc.com/id/48300604

[2] http://articles.marketwatch.com/2012-10-25/industries/34724874_1_shares-jump-devry-shares-first-quarter-profit

[3] http://www.forbes.com/sites/narrativescience/2013/01/04/forbes-earnings-preview-apollo-group-6/

Author

Leave a comment

You must be logged in to post a comment.

Back to Top