.....just 3 days before earnings. Guess all the support guys are taking an extra day in the Hamptons. No big orders traded - just grinding it down. We'll see if the next couple of days lead us upwards going into earnings. Tic toc, tic toc....
CBS MarketWatch August 4, 2005 Corrections Corp. earnings fall on emptier jails Leslie Wines NEW YORK (MarketWatch) - Corrections Corp. America (cxw) Thursday reported second-quarter net income of $14.9 million, or 37 cents a share,down from $14.8 million, or 38 cents a share, a year before, citing a decline in inmate populations at a number of its facilities. Revenue increased to $295.8 million from $287.4 million, due to an increase in compensated man-days. The company forecast earnings of 47 cents to 50 cents a share for the third quarter, and of 56 cents to 59 cents a share for the fourth quarter. On Wednesday the company's stock fell 4 cents to $37.55.
I believe in CCA. I believe that private management of correctional services has been good for the taxpayer and good for society.
However, I no longer see CCA as a growth story and I think their effort to place themselves in that category is hurting them. Rather, over the past five years they have been a de-leveraging story. They have skillfully re-negotiated their debt to take advantage of lower interest rates, and when you look at their financials you see that this is where much of their net income is coming from. Irv Lingo is gold to CCA.
As for growth - although the Feds still have a strong need for beds, when you look at the industry as a whole, it's slowing down. For every facility they fill, there's another customer who pulls back.
I don't know the answer to this, but it's a big strategic issue. I realize the go-go days of the mid-90's are long gone, but what's a realistic expectation for growth? 5 percent? 25 percent?
Remember, just because Doc talked about the Law of Large Numbers doesn't mean it isn't true.