Officials at Education Management Corp. may want to consider expanding their stock repurchase program: The stock price plummeted nearly 20 percent this morning after being traded "more heavily than usual," according to CBS Marketwatch.
The stock price closed at $25.60 per share Wednesday afternoon -- right around the time the company released its second-quarter earnings statement announcing that both revenues and enrollment had dropped. This morning, the stock price dropped to$20.55 before rebounding slightly. As this post went up, it was trading at around $21.20 per share.
EDMC CEO Todd Nelson and Chief Financial Officer Ed West held a conference call with investors Thursday morning. They reported earnings for the quarter were $737.2 million -- down from $771.9 million from the same quarter a year ago. West also reported that enrollment fell 4.5 percent.
Nelson attributed a lot of the school's problems to the country's still struggling economy while also mentioning that the current regulatory climate isn't helping matters either.
While fielding questions from analysts, Nelson was asked a couple of times about EDMC's recent layoffs ... and whether current EDMC employees should feel comfortable with their positions in the company.
"The goal is to always be efficient," Nelson said. "If there are opportunities to streamline the organization, we want to do that. Given the economy and the enrollment trends, that impacted what we wanted to do with online [employees, who were targeted in last week's layoffs].
"Going forward it's hard to predict, but at this point in time we feel comfortable where we are," Nelson added. "But to say we know exactly what the future is going to bring is difficult. One of the things we've always done here is try to come up with ways to become more efficient in our operations and sometimes, unfortunately, that results in employee reductions. But you need people to take care of our students."