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Universal Technical Institute Inc. (NYSE:UTI) recently reported fourth-quarter 2009 results that topped the Zacks Consensus Estimate on the heels of a record enrollment and increased operating margins that boosted the bottom line.

Quarterly earnings of 32 cents a share outshone the Zacks Consensus Estimate of 19 cents, increasing substantially from 2 cents posted in the prior-year quarter. Management expects the momentum to continue in fiscal year 2010 with greater focus on cost containment and increasing utilization rates.

Average capacity utilization jumped 930 basis points year-over-year to 68.1% in the reported quarter. The educational institute, which provides professional automotive, diesel, collision repair, motorcycle and marine programs, reported that 18,800 students enrolled in the quarter under review.

Higher education sees a countercyclical market in an economic recession when post-secondary enrollments tend to rise as both unemployed and employed workers return to school to re-skill themselves and existing students remain in school for a longer duration compelled by the intensely competitive job market.

Net revenue for the quarter climbed 17.6% year-over-year to $99.5 million, reflecting a rise in average undergraduate full-time student enrollment, increase in tuition fees and less tuition discounts.

Operating income jumped to $12.3 million in the quarter from $0.5 million delivered in the year-ago quarter, whereas operating margin surged to 12.3% from 0.6% posted in the prior-year quarter.

Universal Technical Institute ended the quarter with cash and cash equivalents of $56.2 million and shareholders’ equity of $106.7 million. During the fiscal year 2009, the company utilized $16.9 million of cash to buy back shares at an average price of $10.87. However, no shares were repurchased during the quarter. The company still has $23.6 million available under its share repurchase authorization.

Source: Universal Technical Institute Q4 Tops Estimates on Record Enrollment

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