Corrections Corporation of America (CXW) reported a first quarter profit of 30 cents per share. Results beat the Zacks Consensus Estimate by a cent. The company had earned a profit of 29 cents in the year-ago quarter.
Corrections Corporation’s revenue increased 2.7% from the prior-year period to $414.9 million. Results were driven primarily by a 2.7% increase in its average daily inmate population.
Management revenue from federal customers increased 7.5% year over year to $172.2 million. The commencement of its new management contract with the Federal Bureau of Prisons during the second half of 2009 at its newly built Adams County Correctional Center and an increase in U.S. Marshals populations have contributed to this growth.
Management revenue from state partners remained flat year over year at $211.2 million. While the company experienced increased revenues from the state of California, it was offset by a drop in state revenue as a result of the loss of inmates in Alaska and Minnesota at its Red Rock and Prairie facilities.
The company generates revenue from each facility based on a per diem or monthly rate per inmate housed at the facility paid by the corresponding contracting governmental entity.
Operating income decreased 1.6% from a year ago to $73.7 million. Total operating expenses per compensated man-day increased 1.7% year over year. Results reflected an increase in salaries and wages, which resulted from a $4.1 million charge for bonus payments to non-management level staff in lieu of wage increases and for costs of employee medical benefits.
Average daily compensated population increased 2.7% year over year to 78,523. Occupancy level increased to 90.3% from 89.4% reported in the year-ago quarter. Average number of available beds increased 1.6% from the prior-year period to 86,916.
Outlook
Corrections Corporation expects earnings in the range of 28 cents to 30 cents per share for the second quarter, below the Zacks Consensus Estimate of 31 cents. For the full year 2010, the company expects earnings of $1.16 – $1.26 per share.
Corrections Corporation of America is the nation’s largest owner and operator of partnership correction and detention facilities and is one of the largest prison operators in the United States. Currently, the company operates 65 facilities, including 44 company-owned facilities, with a total design capacity of approximately 87,000 beds in 19 states and the District of Columbia.
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