Prison owner Geo Group's 1Q profit, revenue up

BOCA RATON, Fla. (AP) -- Private prison operator Geo Group Inc. said Wednesday that its first-quarter profit rose 56 percent, helped by lower income taxes.

The company also announced that it bought a detention center in Texas for $65 million.

Geo shares fell 6 cents to $38.37 in afternoon trading.

First-quarter net income was $23.4 million, or 33 cents per share, compared with $15 million, or 25 cents per share, a year earlier. The company said it would have earned 38 cents per share excluding costs related to its conversion to a real estate investment trust.

Revenue rose 5 percent to $377 million from $360 million a year earlier.

Analysts expected adjusted earnings of 38 cents per share on revenue of $378.4 million, according to a FactSet survey.

Operating expenses rose 4 percent, to $280.8 million. The company's provision for income taxes plunged to $881,000 from $8.5 million in the first quarter of 2012. The company did not immediately return a call seeking details.

The Boca Raton, Fla., company said second-quarter revenue would be $380 million to $385 million and net income — before excluding any special items — would be 38 cents to 40 cents per share. On that basis, analysts expect unadjusted income of 41 cents per share, according to FactSet.

Geo expects full-year earnings, including about $8 million in one-time costs for the REIT conversion, of $1.58 to $1.68 per share. Analysts expected unadjusted earnings of $1.70 per share.

Full-year revenue will be between $1.51 billion and $1.55 billion, the company said, in line with analysts' forecast of $1.53 billion.

Geo said it signed an agreement to buy the 1,287-bed Joe Corley Detention Center in Montgomery County, Texas, near Houston. It is used to hold detainees for U.S. Immigration and Customs Enforcement. The company was managing the center under a contract with the county government.

Geo said the prison should generate about $27 million in annual revenue. The sale is expected to close in the second quarter.

The company owns or manages 95 facilities with about 72,000 beds in the United States, Australia, South Africa and the United Kingdom. Company officials said in a conference call with analysts that they hope to reopen idle facilities with about 6,000 beds and are marketing operations in California, Michigan and Oklahoma.