Geo: Democratic control of House unlikely to affect federal contracts

Prison and detention center operator The Geo Group saw its third-quarter profits increase to $39.3 million, or 33 cents a share, compared with $38.5 million, or 31 cents a share, in the year-ago quarter, according to earnings released Wednesday.

Revenue at the Boca Raton-based company increased 3 percent in the quarter to $583.53 million, up from $566.76 million in the third quarter of 2017, Geo said.

The company has contracts with the Federal Bureau of Prisons, Immigration and Customs Enforcement, and the U.S. Marshals Service.

During a conference call with Wall Street analysts on Wednesday, Geo Chairman and CEO George Zoley said he doesn’t expect Tuesday’s mid-term election results to have much impact on the company’s government contracts.

“We expect with the Democrats now on the verge of controlling the House [of Representative], that we will see more continuing budget resolutions, which will make the funding approximately consistent with what it has been,” he said.

Geo said third-quarter 2018 results reflect $4.2 million in expenses for activation of a 338-bed detention center at the Folkston ICE Processing Center in Georgia, as well as the 661-bed Eagle Pass Correctional Facility and 1,000-bed Montgomery ICE Processing Center in Texas.

Zoley said he remains optimistic about demand for the company’s services and its outlook for “growth opportunities.”

In April, Geo closed its $360 million acquisition of Community Education Centers. The New Jerseybased business operates rehabilitation centers for prisons and those re-entering communities after prison, managing 12,000 beds across the country.

Geo’s stock closed Wednesday at $21.99 a share, down 70 cents or 3.09 percent, in New York Stock Exchange trading.