GEO Group, one of the country’s largest private prison companies, said it expects to boost revenue in 2019 due to an increase in the Immigration and Customs Enforcement budget.
The Boca Raton-based real estate investment trust, which owns immigration detention centers and private prisons across the United States, reported on Thursday that its fourth quarter net income dropped to $33.4 million, or 28 cents per share, from $36.4 million, or 30 cents per share, during the fourth quarter of 2017. Yet, its earnings beat analysts expectations.
The decline in income was in part due to a $1.6 million loss on real estate assets, as well as activation costs to pay for new detention centers. Some of the costs went to opening its new 1,000-bed Montgomery Processing Center. The detention center was developed under a 10-year contract with ICE, which required $120 million in capital investment from GEO. The new contract is expected to generate about $44 million in annual revenue.
GEO reported total revenue for the fourth quarter 2018 of $599.4 million, up from $569 million for the fourth quarter of 2017. Its stock, traded on the New York Stock Exchange, fell 0.74 percent to $22.93 at the close of the market on Thursday.
GEO Group is heavily dependent on federal and state government contracts and spent $1.7 million on lobbying efforts in 2017, according to the Center for Responsive Politics. The firm also donated more than $500,000 to President Trump’s campaign and inaugural committee and to other Republican candidates, including to Florida’s Governor-elect Ron DeSantis.
The company’s stock dropped significantly in 2016 after the Obama administration announced its plans to phase out private prison contracts with the federal government. Under Trump, U.S. Attorney General Jeff Sessions reversed this decision in 2017 and Geo Group gained the first contract for an immigration detention center under the Trump presidency.
GEO has operations in the U.S., Australia, South Africa and the United Kingdom, and owns and manages 135 facilities with about 96,000 beds, including projects under development. The company has six facilities in Florida, including one in Deerfield Beach. GEO has more than two dozen facilities in California.