Bridgepoint Education and Corinthian Colleges were upbeat about signing up new students entering 2012, signaling that the worst is finally over for U.S. for-profit colleges that had faced dwindling enrollments in the wake of stricter government rules.

Bridgepoint Education Inc reported a higher-than-expected quarterly profit and raised its full-year outlook, while Corinthian Colleges Inc forecast fiscal 2012 profit above Wall Street estimates.

The two companies are recovering from the effects of tough new rules on student loans after government investigations had revealed unethical practices, low graduation rates and huge student debt loads.

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Colleges have seen a slowdown in new enrollments over the last five quarters. This has in turn taken down the total student population -- new students plus those already pursuing degrees -- at these colleges, driving down revenue and margins.

July-September results from top colleges show that the declines are getting softer as year-over-year comparisons get easier.

We expect the rate of year-over-year new enrollment declines to slow significantly in the second quarter and then turn positive in the last half of fiscal 2012, Corinthian's CEO Jack Massimino said in a statement.

Massimino said the company is taking steps to cut cost to help offset enrollment declines. Corinthian, which runs the Everest, Heald and WyoTech campuses, has already cut hundreds of jobs and rolled back expansion plans.

Santa Ana, California-based Corinthian forecast a 2-4 percent drop in new student growth for the second quarter of fiscal 2012, down significantly from the 23 percent drop in the first quarter.

Second-quarter profit is expected to be breakeven to 2 cents a share, while analysts were expecting breakeven earnings.

Corinthian expects full-year earnings of 30-35 cents a share, above Wall Street expectations of 10 cents a share, according to Thomson Reuters I/B/E/S.


Bridgepoint said new student sign-ups fell 8 percent, their first ever decline, after it implemented an orientation program aimed at enrolling only students who are likely to complete their courses and repay debts.

Low tuition fees and higher debt repayment rates helped Bridgepoint deal with the new government regulations better than most of its peers.

Bridgepoint expects 2011 profit of $2.95-$2.98 a share on revenue of $920-$926 million. It had earlier expected $2.56-$2.68 a share on revenue of $886.5-$901.5 million.

Total student enrollments at its colleges -- Ashford University and University of the Rockies -- is expected to be 83,000-85,000 at the end of the year.

This represents a growth of 6.6-9.1 percent from the year-ago period, much smaller than the 45 percent growth last year.

Corinthian's shares jumped 5 percent to $2 on Tuesday morning on Nasdaq. Bridgepoint shares rose 2.5 percent to $22.20 on the New York Stock Exchange.