EmailCareer Education (CECO $19.98 -1.89) reported second quarter earnings
of $0.73 per share, $0.07 better than the Capital IQ Consensus Estimate of
$0.66.
Revenues fell 5.8% year/year to $497.2 million versus the $504 mln consensus.
Career Education Corporation has identified improper practices at certain of its
health education segment campuses relating to the determination of reported
placement rates. The company recently discovered these practices in preparing
its response to the previously disclosed subpoena issued to the company by the
New York Attorney General on May 17, 2011. Career Education's Board of Directors
has directed outside independent legal counsel Dewey & LeBoeuf to undertake a
thorough investigation of these practices. In addition, independent counsel has
been directed to review the determination of student placements at all of the
company's domestic schools.
The company will implement remedial measures based on the results of independent
counsel's investigation. Results of the investigation will be reported to the
New York Attorney General and other relevant accrediting and governmental
bodies, as appropriate. "The integrity of Career Education and its schools is
paramount. I am greatly disappointed that some people within our organization
have acted inappropriately and not lived up to the standards Career Education
expects," said Gary E. McCullough, president and chief executive officer. "We
will take all steps necessary to ensure we accurately determine and report
placement rates in the future."
than one year.
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