Correctional and detention management services provider GEO Group (GEO) reported Monday an increase in third-quarter profit, helped by a sharp rise in revenues from U.S corrections and Construction businesses. The company also maintained its guidance for the fourth quarter and raisedits pro forma earnings outlook for the full year.
For the third quarter, net income rose to $19.26 million or $0.37 per share from $15.86 million or $0.31 per share in the previous year. The results of the latest quarter included post-tax start-up/transition expenses of $634 thousand, compared to $1.77 million in the past year.
Excluding items, pro forma income from continuing operations increased to $19.89 million or $0.38 a share from $17.32 million $0.33 a share in the year-ago period. On average, nine analysts polled by Thomson Reuters expected the company to report earnings of $0.35 per share in the third quarter. Analysts' estimates typically exclude special items.
For the year-ago period, income from continuing operations was $15.49 million or $0.30 per share.
Revenues for the quarter surged to $294.86 million from $254.10 million. Eight analysts were expecting revenue of $277.50 million in the third quarter.
Segment-wise, revenue from U.S. Corrections advance year-over-year to $192.61 million from $177.93 million, and International Services revenue grew to $36.67 million from $33.89 million. Geo Care revenue dipped to $27.72 million from $28.79 million, while Construction revenue surged to $37.87 million from $13.48 million.
General and administrative expenses reduced to $15.68 million from $16.94 million in the comparable quarter of the past year.
Commenting on the results, George Zoley, chief executive officer of Geo, said, "Our strong third quarter earnings results and confirmed outlook for the fourth quarter continue to be driven by sound operational and financial results through our diversified business units. Our already strong balance sheet has been further strengthened by our recent refinancing transactions, and we are now well positioned to take advantage of the robust demand for correctional, detention, and residential treatment beds in our core market segments."
For the nine-month period, net income advanced to $50.47 million or $0.97 per share from $42.46 million or $0.82 per share in fiscal 2008. Pro forma income from continuing operations increased to $52.83 million or $1.02 per share from $45.71 million or $0.88 per share. Revenues grew to $830.30 million from $786.55 million in the same period in fiscal 2008.
Looking ahead, for the fourth quarter, GEO reiterated its outlook expecting earnings to be in a range of $0.38 to $0.39 per share, excluding $0.08 per share of an after-tax charge related to the early extinguishment of debt associated with the redemption of Geo's $150 million senior unsecured notes due 2013 as well as $0.03 per share in start-up/transition expenses. The company currently projects total revenues to be in the range of $313 million to $318 million, including around $25 million in construction revenues. Analysts expect the company to earn $0.38 per share, on revenues of $315.04 million.
For the full year, Geo Group increased its proforma earnings guidance to a range of $1.40 to $1.41 per share, excluding $0.08 per share of an after-tax charge related to the early extinguishment of the debt as well as $0.07 per share start-up/transition expenses and international bid and proposal costs. The company now expects total revenues to be in the range of $1.14 billion to $1.15 billion, including about $102 million in construction revenues. Analysts expect the company to earn $1.37 per share, on revenues of $1.12 billion.
GEO closed Friday's regular trading hours at $21.15 on the NYSE.
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