BOCA RATON, Fla. (AP) -- Shares of GEO Group Inc. jumped 8 percent Monday after the private prison operator raised its full-year earnings outlook, citing the extension of an important contract in California.
The increased guidance came as the company reported an 8 percent decline in first-quarter earnings, which still topped Wall Street estimates.
Net income for the three months ended March 31 was $15 million, or 25 cents per share, down from $16.8 million, or 26 cents per share, in the same period a year ago.
Excluding certain one-time items, the company said its pro forma net income was 31 cents per share. That was a penny better than the consensus estimate of analysts surveyed by FactSet Research.
Revenue was $412.3 million, up from $391.8 million and above the analysts' estimate of $409.6 million.
GEO said it now expects its full-year adjusted earnings to be in a range of $1.54 per share to $1.60 per share on revenue of $1.65 billion to $1.66 billion. Analysts had been looking for revenue of $1.52 per share on revenue of $1.66 billion.
The company said the new guidance reflects the continuation of the Golden State Community Correctional Facility contract in California through mid-December.
Separately, GEO announced that it is buying all the partnership interests in Municipal Corrections Finance for approximately $27 million cash plus the release of about $10 million in cash being held in escrow for MCF's benefit. Municipal Corrections Finance was created in 2001 as a special limited partnership to acquire 11 facilities which MCF leases back to GEO.
CEO George Zoley said the deal will increase the company's cash flows by about $155 million over the life of the lease, boosting its growth strategy.
Shares in the company rose $1.61 to close the regular trading session at $22.14.