WASHINGTON (MarketWatch) — Shares of Career Education Corp. were slammed Wednesday, losing about half their value a day after the for-profit school’s chief executive resigned and the company reported weaker-than-expected third-quarter results.

Reporting its results late Tuesday, the company also said lawyers it retained confirmed “improper placement determination practices” at some of its health-education schools. New student starts fell 22%, the embattled company also said.

The Schaumburg, Ill.-based operator of Le Cordon Bleu College of Culinary Arts and other schools said Gary McCullough had resigned as president and CEO and that it’s begun looking for a replacement.

Career Education Corp.’s shares closed at $8.32 on Wednesday, down 47.8%, or $7.63.

The company CECO reported net income of $10.6 million, or 14 cents a share, down from $26.1 million, or 33 cents a share, in the year-earlier third quarter. Analysts had expected 34 cents a share, according to FactSet.

Interim CEO Steven Lesnik said the company faces a “critical time.”

“Given the complexities of the regulatory environment and other issues that have arisen over the last year, CEC is moving toward a new phase and the board views it as the appropriate time to start the process of putting in place fresh leadership at the CEO level,” he said in a statement.

Career Education Corp., DeVry Inc. DV, -5.49% , ITT Educational Services ESI, +1.94% and other for-profit schools have come under fire from lawmakers and at least one hedge-fund manager recently. Some in Congress, including Sen. Tom Harkin, an Iowa Democrat, have criticized students’ heavy debt loads and low graduation rates.

The schools offer programs that train older and other nontraditional students in fields ranging from mechanical engineering and hospitality management.

Each of those companies is spending more money to lobby the government, according to federal records. Read earlier story about for-profit schools' lobbying.

Earnings, meanwhile, have declined. DeVry reported a fiscal first-quarter profit decline of 22%, and ITT Educational Services reported last month that third-quarter earnings fell 28%.

Shares of Career Education Corp. were cut to hold from buy by Stifel Nicolaus, and to underperform from hold by William Blair on Wednesday.