For-profit educator DeVry (NYSE:DV) operates some nursing and healthcare education programs that are seeing steady trends, as enrollment at its more general schools experiences falling numbers. Brazil is also growing nicely, but the stock is unlikely to move much until domestic trends turn positive.

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Third Quarter Recap
Revenues for DeVry declined 3.9% to $540.8 million. This followed a 3.7% drop in total postsecondary education spring enrollment across all of DeVry's universities and programs; enrollment ended at 126,165 total students. Enrollment trends at the namesake schools were most grim, with new undergraduate student enrollment plummeting nearly 20% and total student enrollment dropping 15.1%. Online also fell a dramatic 13.1%. Chamberlain College of Nursing enrollment was positive overall, as was the DeVry Brazil operations, which were actually the strongest of all programs. Carrington Colleges reported drops of around 30%.

Operating income decreased 30.4% to $95.5 million as total costs rose 4.7% and created negative operating leverage that only exacerbated the revenue decline. Higher interest expense was offset by lower tax expense as net income fell 27.6% to $67.3 million, or $1 per diluted share. Free cash flow generation was strong at nearly $263 million for the first nine months of the year, though this also represented a drop from last year's period.

SEE: Understanding The Income Statement

Outlook and Valuation
Analysts currently project a full-year sales decrease of 4.1% and total revenues just north of $2 billion. The consensus earnings projection stands at $3.57 per share for an annual decline in excess of 23%.

Given these profit expectations and current share price of about $31 per share, the forward P/E is currently 9.05. Rival Apollo Group (Nasdaq:APOL), which is twice as big as DeVry in terms of revenue, has a forward P/E of 10.9. Bridgepoint (NYSE:BPI), Strayer (Nasdaq:STRA) and Capella (Nasdaq:CPLA) each have annual revenues below $1 billion and trade at similar forward earnings ratios.

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The Bottom Line
Industry trends remain difficult and the share prices of the major operators will likely remain dead money until revenue trends stabilize. For the time being, increased regulatory scrutiny and the high prices for-profit educators charge students are taking their toll. Non-profit institutions are equally at fault for charging tuition levels that have increased at a significantly higher rate than inflation for around three decades now.

For the time being, DeVry is turning to Brazil for growth until domestic trends stabilize. It doesn't break out Brazilian revenues, but the country does now account for nearly 30% of total student enrollment.

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At the time of writing, Ryan C. Fuhrmann did not own shares in any of the companies mentioned in this article.