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November 11, 2009
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Corrections Corporation of America (CXW) reported a third quarter profit of 33 cents per share. Results beat the Zacks Consensus Estimate of 32 cents. The company had earned a profit of 33 cents in the year-ago quarter.
However, including an unusual income tax benefit of $7.0 million, the company made a profit of $45.3 million or 39 cents a share, compared with $37.9 million 30 cents per share in the year-ago quarter.
Corrections Corporation’s revenue increased 5.5% from the prior-year period to $426.0 million. Results were driven primarily by a 4.5% increase in its average daily inmate population and a 1.3% increase in revenue per compensated man-day.
Management revenue from state customers increased 6.6% from the prior-year period to $224.9 million. The state revenue increase stemmed from a growth in inmate population from California and Arizona but was partly offset by a fall in inmate count mainly from the states of Minnesota and Washington.
Management revenue from federal customers increased 4.9% year-over-year to $166.4 million. This was due to the company’s new management contract with the Federal Bureau of Prisons at its newly constructed Adams County Correctional Center during the quarter.
Operating income increased 6.6% from a year ago to $79.3 million while EBITDA increased 7.0% year-over-year to $104.8 million. Adjusted free cash flow increased 9.9% from the prior-year period to $68.1 million.
Total operating expenses per compensated man-day increased 0.8% year-over-year. This was primarily due to the ongoing ramp-up expenses incurred at Adams County facility and increase in staffing expenses.
Outlook
Corrections Corporation expects a profit of 33 cents to 35 cents a share for the fourth quarter and a profit of $1.24 to $1.26 per share for the full fiscal year. The company’s projections include the potential for additional pricing pressure and the risk of population declines from some customers. As a result of economic uncertainties, state government agencies are experiencing revenue shortfalls in their budgets.
Corrections Corporation of America is the nation's largest owner and operator of privatized correctional and detention facilities and is one of the largest prison operators in the United States, following only the federal government and three states. Currently, the company operates 65 facilities, including 44 company-owned facilities, with a total design capacity of approximately 87,000 beds in 19 states and the District of Columbia.
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