GEO Group Q2 Normalized FFO Down - Quick Facts

(RTTNews) - GEO Group, Inc. (GEO) reported that its Normalized Funds From Operations For the second quarter 2015 decreased to $46.4 million, or $0.63 per share, from $51.9 million, or $0.72 per share in the second quarter 2014.

GEO reported second quarter 2015 Adjusted Funds From Operations of $57.5 million, or $0.78 per diluted share, compared to $60.9 million, or $0.85 per diluted share, for the second quarter 2014.

Net income attributable to the company for the quarter declined to $28.3 million, or $0.38 per share, from $38.9 million, or $0.54 per share in the prior year.

GEO's second quarter 2015 results reflect approximately $0.7 million, net of tax, in mergers and acquisition related expenses and approximately $2.9 million, net of tax, in start-up costs. Adjusting for these items, GEO reported second quarter 2015 adjusted net income of $0.43 per diluted share.

Compared to the second quarter 2014, GEO's second quarter 2015 results reflect significant start-up expenses related to the activation of 4,320 company-owned beds at two existing company-owned facilities, North Lake Correctional Facility in Michigan and Great Plains Correctional Facility in Oklahoma, and a company-owned expansion at the Adelanto Detention Facility in California.

Quarterly total revenues was $445.9 million up $412.8 million for the second quarter 2014. Revenues for the latest-quarter reflected $20.4 million in construction revenues associated with GEO's contract for the development and operation of the new 1,300-bed Ravenhall Prison Facility in Australia.

Analysts polled by Thomson Reuters expected the company to report earnings of $0.73 per share and revenues of $448.94 million for the quarter. Analysts' estimates typically exclude special items.

The company announced that on July 31, 2015, its Board of Directors declared a quarterly cash dividend of $0.62 per share. The quarterly cash dividend will be paid on August 24, 2015 to shareholders of record as of the close of business on August 14, 2015.

For the third quarter 2015, GEO expects total revenues to be in a range of $473.0 million to $478.0 million, including approximately $24.0 million in construction revenue associated with GEO's contract for the development and operation of the Ravenhall, Australia project. GEO expects third quarter 2015 AFFO to be in a range of $0.89 to $0.91 per diluted share. GEO expects third quarter 2015 adjusted earnings to be in a range of $0.52 to $0.54 per share. GEO's third quarter 2015 guidance reflects $0.02 per share in start-up expenses.

Analysts expect the company to report earnings of $0.85 per share and revenues of $497.77 million for the third-quarter.

For the fourth quarter 2015, GEO expects total revenues to be in a range of $509.0 million to $514.0 million, including approximately $59.0 million in construction revenue associated with GEO's contract for the development and operation of the Ravenhall, Australia project. GEO expects fourth quarter 2015 AFFO to be in a range of $0.91 to $0.93 per diluted share. GEO expects fourth quarter 2015 adjusted earnings to be in a range of $0.54 to $0.56 per diluted share. GEO's fourth quarter 2015 guidance reflects $0.02 per diluted share in start-up expenses.

GEO updated its financial guidance for 2015 to primarily reflect additional start-up costs in the third and fourth quarters related to the reactivation of the previously idle North Lake Correctional Facility in Michigan (the "North Lake Facility") during the second quarter 2015.

GEO expects full-year 2015 total revenues to be in a range of $1.855 billion to $1.865 billion, including approximately $125 million in construction revenue associated with GEO's contract for the development and operation of the Ravenhall, Australia project. GEO's full-year 2015 NOI is expected to be in a range of $512 million to $516 million and full-year 2015 Adjusted EBITDA to be in a range of $372 million to $376 million.

GEO expects its full-year 2015 AFFO to be in a range of $3.30 to $3.34 per diluted share. GEO expects adjusted earnings for the full year 2015 to be in a range of $1.90 to $1.94 per diluted share. GEO's full-year 2015 guidance reflects $0.11 per diluted share in mergers and acquisitions related expenses and start-up expenses.

Wall Street currently is looking for fiscal year 2015 earnings of $3.16 per share on annual revenues of $1.88 billion.