Tuesday, prison operator Corrections Corp. of America (CXW) posted higher profit for the fourth quarter on increased revenues and through higher inmate populations and cost control. The board also approved a stock repurchase program of up to $250.0 million. Looking ahead, the company provided earnings guidance for the first quarter and fiscal 2010.
Nashville, Tennessee- based Corrections Corp., reported fourth quarter net income of $42.5 million or $0.36 per share, up from $40.5 million or $0.32 per share in the prior year quarter.
On average, eight analysts polled by Thomson Reuters expected the company to earn $0.34 per share for the quarter. Analysts' estimates typically exclude one-time items.
Total revenue for the quarter increased 4% to $427.1million from $410.7 million in the comparable quarter, primarily driven by a 4.7% increase in average daily inmate populations.
Analysts expected the company to generate revenue of $430.74 million for the fourth quarter.
In the current quarter management revenue from federal partners was $170.9 million, up 5.5% from $162.0 million in the year-ago period, helped by the commencement of new management contract during the third quarter of 2009 with the Federal Bureau of Prisons and increases in U.S. Marshals populations, partially offset by a reduction in revenues from Immigration and Customs Enforcement.
Management revenue from state partners rose 3.2% to $222.1 million from $215.3 million in the same quarter last year, primarily attributable to increases in inmate populations from California and Arizona that were partially offset by a reduction in inmate populations primarily from the states of Minnesota, Washington, and Alaska.
Operating income for the fourth quarter edged up to $84.8 million from $82.5 million in the same quarter last year. Results for the recent quarter was net of an increase in depreciation and amortization of $1.5 million as a result of placing numerous expansion and development projects into service and an increase in general and administrative expenses of $1.4 million.
For the full year, the company reported net income of $154.9 million or $1.32 per share compared to $150.9 million or $1.20 per share last year. Total revenue increased to $1.6 billion from $1.5 billion in the prior year.
Analysts expected the company to earn $1.26 per share on revenue of $1.67 billion for the full year.
Looking forward, for the first quarter of 2010 the company expects earnings per share to be in the range of $0.28 to $0.30 and fiscal 2010 earnings to be in the range of $1.16 per share to $1.26 per share.
Analysts expect earnings of $0.33 per share for the first quarter of 2010 and for the full year 2010 street analysts estimates earnings of $1.33 per share.
The company's board also approved a stock repurchase program of up to $250.0 million of its common stock effective through June 30, 2011. Funds for the repurchase of shares are expected to come primarily from cash on hand, borrowings under revolving credit facility and cash from operating activities. Corrections Corp., had about 116 million shares outstanding as of February 1.
CXW closed Tuesday's regular trading at $17.83, down $0.03 or 0.17% on a volume of 2.39 million shares on the NYSE. In the after hours the shares further declined 4.37% or $0.78, trading at $17.05
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