Capella Education Company (CPLA), the provider of online education, in view to further enhance shareholders’ return, recently raised its existing share repurchase authorization to $75 million.
Earlier, in July 2008, Capella’s board had authorized the share repurchase program of up to $60 million with no expiration date. As of June 30, 2010, the company had bought back 0.6 million shares aggregating approximately $38 million, and still has $22 million at its disposal under its previous authorization.
Capella’s healthy balance sheet not only positions it to grab business opportunities and make potential investments, but at the same time helps it to fulfill its commitment of returning surplus cash to shareholders in the form of share buybacks.
The company’s strong liquidity position is evident from its cash, cash equivalent and marketable securities position of $192.3 million with no debt at the end of the second quarter of 2010. This offers financial flexibility to drive future growth.
Capella recently delivered stronger-than-expected second-quarter 2010 results buoyed by a rise in enrollment. The quarterly earnings of 86 cents a share, outstripped the Zacks Consensus Estimate of 79 cents, and grew 53.6% from 56 cents posted in the prior-year quarter.
Total active enrollment soared 32.1% year over year to 38,669. Due to the surge in enrollment, the quarterly revenue of $105.2 million surged 31.3% compared with the prior-year quarter, which also outpaced the Zacks Consensus Estimate for revenues of $104 million.
Capella at present expects enrollment and revenue to rise in the range of 24% to 25.5% in the third quarter of 2010. For fiscal 2010, the company expects enrollment and revenue growth to be at the high-end of the previously provided guidance range of 26.5% to 28.5%.
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