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Chegg, K12 earnings show growth in online-education spending

Chegg Inc.’s results and outlook topped Wall Street estimates Monday.


Chegg Inc.

Quarterly earnings from online-education companies Chegg Inc. and K12 Inc. topped Wall Street expectations Monday, showing growth as distance-learning initiatives have endured in many places for more than half a year, but their after-hours share performance diverged.

Chegg
CHGG,
-0.08%

shares declined in the extended session Monday after the digital textbook and scholastic services company’s results and outlook topped Wall Street estimates following a year when its share price has more than doubled.

On the other hand, shares of K12
LRN,
-1.63%

rose in the extended session on better-than-expected results; for the year, shares have risen 39%.

Chegg shares declined 2% after hours, following an initial 10% drop after the earnings report hit, and a 0.1% decline in the regular session to close at $86.69. As of Monday’s close, Chegg shares are up 129% for the year, compared with a 5.3% rise by the S&P 500 index
SPX,
-1.85%
.

The company reported a third-quarter loss of $37.1 million, or 29 cents a share, compared with a loss of $11.5 million, or 10 cents a share, in the year-ago period. Adjusted earnings were 17 cents a share.

Revenue rose to $154 million from $94.2 million in the year-ago quarter. Analysts surveyed by FactSet had forecast earnings of 10 cents a share on revenue of $143.9 million.

Chegg expects fourth-quarter revenue of $188 million to $190 million, while analysts had forecast revenue of $183.4 million. For 2021, the company expects revenue of about $775 million, while analysts had forecast $758.5 million.

K12 shares rose 11% after hours, following a 1.6% decline to close the regular session at $28.23, as the online education company reported a surprise profit.

For the fiscal first quarter, K12 reported net income of $12.7 million, or 30 cents a share, versus a loss of $9.7 million, or 25 cents a share, in the year-ago quarter. Revenue rose to $371 million from $257.1 million in the year-ago period.

Analysts surveyed by FactSet had forecast a loss of 32 cents a share on revenue of $362.6 million.

K12 forecast fiscal 2021 revenue of $1.45 billion to $1.47 billion, while analyst expect $1.42 billion.


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