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Bridgepoint loses $6.5M in 1Q

San Diego’s Bridgepoint Education (NYSE: BPI) reported a $6.5 million loss in its preliminary financial report for the past quarter, but was unable to file a final report because of a dispute with the Securities and Exchange Commission over how it reports its revenues.

In its preliminary report, the company lost 10 cents per share in the first quarter versus a gain of 43 cents during the same period last year, when it generated $18.37 million.

But that report is not final, because has been working to comply with an SEC finding on May 2 that it needed to do a more thorough job of tracking how much revenue it could reasonably expect from its students, such as in cases where students lose financial aid.

Based on the company's preliminarily analysis over the past 10 days, the SEC’s requirement for a student-by-student reassessment resulted in a $700,000 decrease in revenue and a $200,000 increase in bad debt expense. The company is currently evaluating whether the SEC finding will require it to reevaluate last year’s earnings as well.

The news prompted a sell-off of the company’s shares. By noon on Wall Street, shares were down more than 11 percent.

Based on its preliminary statement, the ratings team at The Street.com rated Bridgepoint as a hold, with a ratings score of C, saying that the company’s expanding profit margins are counterweighed against its “feeble” earnings growth, “deteriorating” net income and “weak” operating cash flow.

“There is little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks," the team said.

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