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CoreCivic Inc (CXW) Reports Q3 2023 Earnings, Net Income Drops but Adjusted Earnings Per Share ...

  • Net income in Q3 2023 totaled $13.9 million, a decrease from $68.3 million in Q3 2022

  • Adjusted net income in Q3 2023 was $15.6 million, up from $9.7 million in Q3 2022

  • Adjusted Diluted EPS increased by 75% to $0.14

  • Company repaid $137.7 million of debt in the first nine months of 2023

CoreCivic Inc (NYSE:CXW) announced its financial results for the third quarter of 2023 on November 7, 2023. The company reported a net income of $13.9 million, or $0.12 per diluted share, a significant decrease from the net income of $68.3 million, or $0.58 per diluted share, in the third quarter of 2022. However, the adjusted net income for Q3 2023 was $15.6 million, or $0.14 per diluted share, representing a per share increase of 75% from the adjusted net income of $9.7 million, or $0.08 per diluted share, in Q3 2022.

Financial Performance and Highlights

CoreCivic Inc (NYSE:CXW) reported that the $0.06 per share increase in Adjusted Diluted EPS primarily resulted from higher federal and state populations, combined with lower interest expense resulting from the company's debt reduction strategy. Earnings before interest, taxes, depreciation, and amortization (EBITDA) was $72.8 million in Q3 2023, compared with $147.9 million in Q3 2022. Adjusted EBITDA, which excludes special items, was $75.2 million in Q3 2023, compared with $68.4 million in Q3 2022, an increase of 10.0%.

Capital Allocation Strategy and Debt Repayment

The company continued to execute on its capital allocation strategy, repaying nearly $140 million of debt net of the change in cash so far this year, and reducing leverage, measured by net debt to EBITDA, to 2.8x using the trailing twelve months. The company's debt reduction strategy has contributed to a meaningful reduction in interest expense from the prior year, despite an increasing interest rate environment.

Financial Tables and Analysis

According to the consolidated balance sheet, as of September 30, 2023, CoreCivic Inc (NYSE:CXW) had total assets of $3,068,608,000 and total liabilities of $1,610,306,000. The company's total stockholders' equity was $1,458,302,000. The company's total current assets were $419,965,000, and total current liabilities were $304,367,000.

Future Outlook

Based on current business conditions, CoreCivic Inc (NYSE:CXW) provided an update to its financial guidance for the full year 2023. The company expects net income to be between $58.7 million and $64.9 million, and adjusted net income to be between $62.3 million and $68.5 million. Diluted EPS is expected to be between $0.51 and $0.57, and Adjusted Diluted EPS is expected to be between $0.54 and $0.60.

Explore the complete 8-K earnings release (here) from CoreCivic Inc for further details.

This article first appeared on GuruFocus.

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