K12 provides proprietary curriculum, software and education services for students, primarily those in kindergarten through 12th grade. The company said its quarterly revenue rose as student enrollment in classes that use its program climbed 46 percent. Recent acquisitions also helped. But the company's revenue suffered from steps it took to account for possible reductions in state funding for education.
Strapped states have cut funding for public schools in effort to balance their budgets in the weak recovery. Politicians in several states have proposed more cuts.
The company said its net income for the quarter ended Dec. 31 was $4.2 million, or 11 cents per share, down 46 percent from $7.8 million, or 23 cents per share, during the same period a year before.
Analysts polled by FactSet had predicted significantly higher earnings of 24 cents per share.
Revenue in the October-December quarter rose 29 percent to $166.5 million from $129 million. Analysts expected stronger growth, to $169.8 million.
The company's costs grew faster than revenue, increasing 39 percent. K12's spending on product development more than doubled, costs for instruction rose by a third and general expenses rose 45 percent.
For the 2012 fiscal year, which ends in June, K12 said it expects revenue of $680 million to $690 million, lower than analysts' prediction of $693.4 million.
Shares fell $2.58 to $22.50 Tuesday afternoon. The stock had been up 40 percent in 2012 after a decline late in 2011, and has ranged from $17.07 to $39.74 in the past 52 weeks.
