BOCA RATON, Fla. - The GEO Group, Inc. (NYSE:GEO), a service provider for secure facilities, reported its financial results for the first quarter of 2024, missing both earnings and revenue expectations set by analysts.
The company's shares fell 8.5% in response to the news, indicating a negative market reaction to the earnings report and future financial guidance.
For the first quarter, GEO Group posted earnings per share (EPS) of $0.18, slightly below the analyst consensus of $0.19. Revenue for the quarter was $605.7 million, which did surpass the consensus estimate of $603.84 million but marked a slight decline from the previous year's first quarter revenue of $608.2 million.
Comparing to the first quarter of the prior year, the company saw a decrease in net income from $28.0 million to $22.7 million and a dip in Adjusted EBITDA from $130.9 million to $117.6 million.
George C. Zoley, Executive Chairman of GEO, commented on the results, stating, "During the first quarter of 2024, our diversified business units continued to deliver strong operational and financial performance." He attributed the company's steady results to a multiyear strategy of balance sheet deleveraging, which has allowed for successful refinancing, lowering the average cost of debt and increasing financial flexibility.
Looking ahead, GEO Group provided updated financial guidance for the full year 2024, projecting net income to be between $55 million and $75 million on annual revenues of approximately $2.4 billion.
This forecast falls short of analyst expectations, which had anticipated $2.45 billion in revenue. The company also expects a net loss in the second quarter of 2024 ranging from $27 million to $30 million, primarily due to an $86 million loss on extinguishment of debt, pre-tax, resulting from refinancing transactions.
The company's recent developments include a five-year contract awarded to its subsidiary, GEO Transport, Inc., to provide air operations support services to U.S. Immigration and Customs Enforcement (ICE), which is expected to generate approximately $25 million in annualized revenues.
In response to the financial results and guidance, the stock experienced a significant downturn, with an 8.5% drop reflecting investor concerns over the earnings miss and cautious outlook for the year ahead.
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