Learning Tree soars on 1Q results

Learning Tree International, Inc. (Nasdaq: LTRE) grew 31 percent Friday after it said net income for its first quarter was 35 cents a share, toppling First Call's prediction of 22 cents a share, as course participants increased, and costs declined.

Shares of the company, which provides courses for information technology professionals, were up 7 5/8 to 31 5/8. Similar companies include click2learn.com (Nasdaq: CLKS), which was down 1/8 to 19, and recently public Skillsoft (Nasdaq: SKIL), which was down 1/4 to 16 1/2. DigitalThink (Proposed ticker: DTHK) is a similar company scheduled to go public the week of Feb. 21.

USB Piper Jaffray raised its rating on the stock to "strong buy" from "buy" following the earnings news.

Learning Tree said net income for the first quarter was up 195 percent to $7.7 million, or 35 cents a share, versus $2.6 million, or 12 cents a share for the same quarter last year.

Revenue for the quarter ended December 31 was up 9 percent to $49.4 million from $45.2 million for 1998's corresponding quarter. Income from operations for the first quarter this year increased by 271 percent to $10.5 million versus $2.8 million for the 1998 quarter.

The growing number of participants in the company's courses and its tightening of expenses were cited for the gains. Gross profit rose to 63.1 percent of revenues in the first quarter from 56.1 percent in !998's first quarter. Course development expenses declined because of the company's decision last July to discontinue further or computer-based training course development.

Learning Tree also said its distance learning course for students in the United States, Canada, the United Kingdom, Sweden and France is in beta testing, and it is now seeking a site for its first education center in Chicago.