<div id="subtitle">Credit Suisse downgrades K12 despite strong results on worries over state education budgets</div><div><p>A Credit Suisse analyst downgraded education services provider K12 Inc. Monday despite its "strong" second-quarter results, citing worries about state government budget cuts for education.</p><p>K12 provides online learning programs for students in kindergarten through 12th grade. Its technology is used by homeschoolers, online public schools and its own online private school program.</p><p>Analyst Kelly Flynn said K12 reported solid quarterly results on Friday. However, worries over state budget cuts for education led her to downgrade K12 to "Neutral" from "Outperform."</p><p>The future is murky, as K12 won't likely talk much about 2011 enrollments or revenue expectations until September, which could weigh on shares, Flynn wrote in a note to investors.</p><p>Baird analyst Amy Junker disagreed, saying in a note Monday that the Obama administration supported charter schools, including the virtual schools K12 services. The administration's 2011 budget includes $490 million in funding for charter schools, she said.</p><p>She thinks that the company could announce expansion into new states this spring and summer, helping drive shares higher.</p><p>Shares of K12 dipped 9 cents to $19.11 in afternoon trading.</p><img src="http://admatch-syndication.mochila.com/images/ad.gif?aid=68703799&bid=informcom" /></div><div id="copyright"><div>

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