Universal Technical’s (UTI) fourth-quarter 2010 earnings missed the Zacks Consensus Estimate, and fell 9.4% from the prior-year quarter. The average enrollment of the educational institute rose 15.4%, but new student growth slid 5% during the quarter.
Management hinted that the regulation proposed by the Department of Education may moderate the growth of new students and average enrollments. The company forecast new and average students growth in the low and mid single-digit rates, respectively, for fiscal 2011 compared with double-digit growth in the prior-year.
The company had also projected a subdued earnings outlook for the year that had fallen short of the Zacks Consensus Estimate. Consequently, we have an Underperform rating on the stock.