Investors soured on Corinthian Colleges Inc.’s earnings outlook Wednesday, sending shares down 17% to $14.
The Santa Ana-based operator of for-profit schools said it expects to post net income of $18 million to $20 million in the quarter ending June 30, less than the $22 million forecast by a survey of analysts by Thomson Financial.
Meanwhile, Corinthian said it posted net income of $22.4 million in the quarter ended March 31, 5% higher than a year earlier. Revenue was 17% higher to $254 million.
It’s opened five schools this year.
Last week Corinthian said the Securities and Exchange Commission had completed its review of the company’s 2004 financial report.
The company said that the SEC didn’t have “any further comments at this time” about the report, Corinthian said in a release. The company has agreed to the SEC’s request to include more disclosure in how it values some intangible assets.
In November, the SEC told Corinthian that it was looking at the company’s report for the year ended June 30. Earlier this year Corinthian said it had finished its review of the results, but didn’t make any recommendations to the company.
Corinthian, which offers degrees in healthcare, business, technology and criminal justice, has come under the scrutiny of regulators in the past year.
Late last year, the federal Department of Education restored Corinthian’s ability to receive advanced financial aid funding after looking into financial aid issues at its San Jose campus.
Meanwhile, Corinthian faces several lawsuits filed by students. In March, the company learned that about 80 former and current students at Corinthian’s Florida Metropolitan University filed suit, alleging the company didn’t disclose the campus’ lack of accreditation by the Commission on Colleges of the Southern Association of Colleges and Schools.
The lack of accreditation prevented the students from transferring credits to other schools, according to a report on the lawsuit from Reuters.
Corinthian said the suit was “without merit” and plans to seek arbitration instead of litigation.
