Corrections Corp. of America (CXW: Quote), an operator of correctional facilities, Friday agreed to modify its existing contract with the California Department of Corrections and Rehabilitation.
As a result of the contract modification, the company said it will reduce the number of inmates it houses for the state from up to 9,588 to an average daily population of 9,038 for the upcoming fiscal year ending June 30, 2013.
The company currently houses about 9,200 inmates from the state of California.
As a result, the company said it expects to begin ramping down the California out-of-state population to align with the CDCR's new budgeted level beginning in July 2012.
The reduction is expected to be completed by October 1, 2012. The contractual 90% occupancy guarantee will be adjusted to reflect the lower contract capacity. All other terms of the contract remain unchanged.
The company said the full-year impact of the contract modification on earnings per share is estimated to be about $0.04. However, at the present time, the company said it is not revising its 2012 guidance, but will consider this and other factors when it provides updated guidance as part of second quarter earnings release in August.
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by RTT Staff Writer
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