By Saabira Chaudhuri
K12 Inc.'s /zigman2/quotes/205813628/composite LRN -3.85% fiscal first-quarter profit slipped 5.3% as the online education provider saw a double-digit revenue increase weighed down by a continued rise in costs.
The company, which conducts web classes for U.S. students in kindergarten through 12th grade, has seen its revenue steadily grow as demand for online education increases and student enrollment has jumped.
The company's costs have also been on the rise. In the latest period, instructional expenses were up 17%, and selling, general and administrative expenses rose 15%. However, in smaller category of product development, expenses fell 33%.
Chief Executive Ron Packard said the quarter was in line with expectations and puts K12 on track to meet annual guidance." Our core virtual Managed Public School business remains strong and is growing at a healthy rate." K12 reported that managed public schools' average student enrollments jumped 14%.
For the quarter ended Sept. 30, K12 reported a profit of $4.4 million, or 11 cents a share, compared with a year-ago profit of $4.6 million, or 12 cents a share. Revenue rose 14% to $221.1 million.
Analysts polled by Thomson Reuters recently expected per-share earnings of 14 cents and revenue of $221.8 million.
Costs and expenses jumped 15%.
In the international and private pay business, cumulative student enrollments rose 4.7%, while semester course enrollments were up 3.9%.
Shares of K12, which backed its view for the year, closed Monday at $20.10 and were inactive premarket. The stock has fallen 42% in the past 12 months.
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