The Hindu Business Line  Aug 14  Comment 
Labour Ministry will soon launch a social security scheme for domestic workers on pilot basis in Delhi and Hyderabad as part of Central government’s commitment to provide health insurance for all, Un...
newratings.com  Jul 28  Comment 
WASHINGTON (dpa-AFX) - ITT Educational Services Inc (ESI) released earnings for its second quarter that rose compared to the same period last year. The company said its bottom line totaled $4.31 million, or $0.18 per share. This was up from...
MarketWatch  Jul 13  Comment 
ITT Educational Services may struggle to meet recent obligations imposed on it by the government, officials told investors.
Mondo Visione  Jul 11  Comment 
Today the European Commission adopted two new "off-the-shelf", i.e. "ready-to-use" financial instruments for ESI Funds investments, to ease access to funding for young businesses and urban development project promoters. In the 2014-2020...
Forbes  Jun 16  Comment 
Count the Department of Education among those who want to revoke recognition for the Accrediting Council for Independent Colleges and Schools (ACICS), one of the gatekeepers of federal student aid dollars. ACICS has accredited troublesome...
The Economic Times  Jun 12  Comment 
In a letter, TEA President A Shaktivel highlighted an array of issues like the need for an ESI hospital for Knitwear workers, hostel for women workers etc.
New York Times  Jun 10  Comment 
How bad will it be for students if ITT Educational Services, the troubled for-profit school, fails? Ask the former students of a company called Wilfred.
The Economic Times  May 8  Comment 
The inclusion of ESI will extend the insurance benefits to over 10 crore people. Currently, the health protection scheme is targeting to cover around 8 crore families.


ITT Educational Services (ESI) is the fourth largest for-profit university in the U.S., offering 35 degree programs to approximately 80,000 students, both online and at 124 campuses and 5 learning sites in 38 states. The company's revenue comes from tuition charges.[1] The company earned $1.3 billion in revenue and $300 million in net income in 2009.[2]

ITT Educational Services has traditionally focused on providing technology-related associate degree programs, but has expanded its offering to include an increased number of degree programs outside of technology in addition to a greater number of bachelor's degrees. Bachelors programs generate more revenue than Associate's degree programs because they are often 4-year programs versus 2-year Associate programs, and Bachelor's programs have greater tuition costs. To provide these new services, ITT has opened many new smaller branch campuses and learning sites.

Historically, enrollment at for profit educational institutions has increased during economic downturns as poorer job prospects cause prospective students to view continuing eduction more favorably. The global economic downturn has increased student enrollment and as a result, the company's net revenue increased by 30% in 2009.[2]

Company Overview

The ITT Technical Institutes offers 35 degree programs in fields in the following schools of study:[3]

  • Business: includes the fields accounting, business administration, financial services, marketing and advertising, and manufacturing
  • Drafting and Design: includes the fields computer-aided drafting, electrical and electronics drafting, mechanical drafting, architectural and construction drafting, civil drafting, interior design, landscape architecture, and multimedia communications
  • Electronics Technology: includes the fields electronics product design and fabrication, communications, computer technology, industrial electronics, instrumentation, and telecommunications
  • Criminal Justice: includes the fields corrections, security and policing, investigations, and cyber security
  • Information Technology: includes the fields network administration, technical support, network technology, and systems technology
  • Health Sciences: includes the fields nursing and health information technology

Student Demographics[4]


  • 19 or less - 8%
  • 20 through 24 - 34%
  • 25 through 30 - 28%
  • 31 or over - 30%


  • Male - 75%
  • Female - 25%


  • Caucasian - 49%
  • Other - 51%

Business Growth

FY 2009 (ended December 31, 2009)[2]

  • Net revenue increased 30% to $1.3 billion. The company attributes the growth to a 27.1% increase in student enrollment and a 5% increase in tuition rates.
  • Net income increased 49% to $300 million.

Trends and Forces

Capitalizing on Increased Demand for Education During Global Economic Slowdown

Historically, enrollment at for profit educational institutions has increased during economic downturns as poorer job prospects cause prospective students to view continuing eduction more favorably. People of all ages are going back to school to get a better job and increase their job prospects -- 30% of the university's students are over the age of 31, a 6% increase from the previous year.[4] ITT has been no exception from this trend. The global economic slowdown has increased their number of students and thus raised revenues. As a result, the company's net revenue grew by 30% in 2009.[2]

The U.S. Department of Education estimates that the post-secondary education market is worth at least $370 billion. The Department of Education estimates that nearly 40% of all students enrolled in post-secondary education programs are older than 24; 80% of Career Education's enrolled students are 'non-traditional' and older than 21. Over the next six years, the percentage of 18-24 year old students will increase by 16%, and the number of non-traditional students should grow at a similar rate.

Government Regulation and Financial Aid Policies Determine ITT's Fiscal Success

The post-secondary education market is highly regulated for any educational institutions that receive funding from the government; in ITT's case, government funding is in the form of financial aid programs that subsidize qualified students' education costs. Because 70% of ITT's annual revenue comes from Federal Education Financial Aid Programs, any significant change in policy for the various financial aid programs will affect ITT's revenue.[5]


The post-secondary education market is extremely competitive and not dominated by any single player. The United States has approximately 6,550 post-secondary education institutions:[6]

  • 2,730 private, for-profit schools
  • 2,000 public, non-profit schools
  • 1,820 private, non-profit schools

In addition to this extreme market fragmentation, the extensive accreditation process acts as a significant barrier to entry for new companies.

Of the other private, for-profit schools that target non-traditional students, Apollo Group (APOL) , DeVry University (DV), and ITT Educational Services (ESI) pose the greatest competition to Career Education.

Career Education (CECO) is a global for-profit university that offers associate, master's, bachelor's and doctoral degree programs in vocational areas such as business, communications and IT. The company had an enrollment of 116,000 students on 90 campuses in the the US, France, Italy, and UK.

Apollo Group (APOL) operates the University of Phoenix, the largest private, for-profit postsecondary education institute. They serve more than 355,800 enrolled students, at 102 campuses and 157 learning centers in forty states.

DeVry (DV) served approximately 130,000 students through its four subsidiary institutions - DeVry University, Ross University, Chamberlain College of Nursing, and Becker Professional Review. DeVry University is an undergraduate institution with more than 80 locations and the Keller Graduate School of Management. Ross University operates the Ross University School of Medicine and the Ross University School of Veterinary Medicine in Dominica.


  1. ESI 2009 10-K "Overview" pg.1
  2. 2.0 2.1 2.2 2.3 ESI 2009 10-K "Selected Financial Data" pg. 32
  3. ESI 2009 10-K "Programs of Study" pg. 3-5
  4. 4.0 4.1 ESI 2009 10-K "Student Admission and Retention" pg. 5-6
  5. ESI 2009 10-K "Federal and Other Financial Aid Programs" pg. 8-10
  6. CECO 2009 10-K "Industry Background and Competition" pg. 2-3
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