J.P. Morgan Comments On CPLA's "Strong" 1Q11

J.P. Morgan is commenting on Capella Education Co.'s CPLA “strong” 1Q11. “This morning, CPLA reported its 1Q11 EPS of $0.97 (ex. one time items), above our estimate of $0.84,” J.P. Morgan writes. “1Q11 top line slightly beat our estimates (by ~1%) and CPLA's own guidance due to better enrollment results. “Also, G&A expenses were lower than expected due to workforce reductions and lower infrastructure investments compared to 1Q10. More importantly, CPLA guided that 2Q11 new enrollments (“starts”) will decline 40% y/y (following a 36% y/y decline in 1Q11) as a result of 1) tough y/y comparables, 2) higher competition for CPLA's high quality students, 3) the new assessment program for bachelor's candidates with no prior college credit, and 4) lower prospective student confidence in the uncertain economic environment.” Capella Education closed Tuesday at $50.29.