Profit down 2% for jail management company

Boca-based Geo cites detention center counts

BOCA RATON — Boca Raton-based prison management company Geo Group said Monday its second-quarter profits declined 2 percent, blaming lower than expected populations in illegal immigration detention centers.

In New York Stock Exchange trading Monday, Geo stock closed down $2.04 or 7.27 percent to $26.02 a share.

For the quarter, Geo reported lower occupation rates at “a few” U.S. Immigration and Customs Enforcement centers, compared to the same period last year. In a news release, Geo said it expects those rates to improve, but to be “slightly below” projected levels.

George Zoley, chairman and CEO of Geo, on Monday’s conference call with analysts said he was “reasonably pleased” with quarterly results. He said while there were lower detainee populations due to a reduction in border crossings, Geo expects “incremental increases” in ICE-driven populations through the balance of the year.

Zoley said Geo has submitted bids to operate ICE centers in Arizona and Texas, which it expects to be awarded by the end of the year. Geo also has bid to operate the governmentowned Taft, Calif., prison which it expects to be awarded by the end of 2017.

The Florida Legislature has allocated $2.9 million to Geo to expand its “continuum of care” services, which provides offender services during and after prison release, the company said.

The second-quarter results also reflected expenses associated with the closing of the $360 million Community Education Centers acquisition in April. The New Jersey-based rehabilitation business operates rehabilitation centers for prisons and those re-entering communities after prison, managing 12,000 beds across the country.

Geo, the largest provider of detention services for ICE and the U.S. Marshals Service, has said it expects to be a beneficiary of the Trump administration’s crackdowns on illegal immigration. The company also operates prisons for the federal Bureau of Prisons.

Quarterly net income was $31 million, or 25 cents a share, compared to $23 million, or 21 cents a share, in the same quarter a year ago. On an adjusted basis, profits were $38.5 million, or 32 cents a share, compared with $39 million, or 35 cents a share.

Revenue for the quarter increased 5.2 percent to $577 million from $548 million for the same quarter in 2016. Second-quarter revenues included $33.9 million in construction revenue associated with the 1,300-bed Ravenhall prison in Australia.

With its acquisition of Community Education Centers, Geo said it manages 98,000 beds, which makes it the fifth largest correctional organization in the world.

Chairman and CEO George Zoley said while there were lower detainee populations due to a reduction in border crossings, Geo expects “incremental increases” in ICEdriven populations through the year.