GEO Group expects to boost revenue in 2019 after ICE budget grows

The private prison REIT reported a decline in Q4 earnings

Miami /
Feb.February 14, 2019 04:30 PM

GEO Group CEO George Zoley

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.


Related Articles

arrow_forward_ios
David Grutman and Pharrell’s Goodtime Hotel had received nearly 30 noise violations (Carma Connected, Getty)
Too much of a good time? David Grutman and Pharrell’s Goodtime Hotel could lose entertainment permit
Too much of a good time? David Grutman and Pharrell’s Goodtime Hotel could lose entertainment permit
Related Companies Chairman Stephen Ross with One Flagler (Related, Getty)
Prayers answered? Related Companies closes on church site for planned office tower in downtown West Palm
Prayers answered? Related Companies closes on church site for planned office tower in downtown West Palm
Grover Corlew principal Mark Corlew with Bank of America Tower in Boca Raton (Grover Corlew)
Grover Corlew buys Bank of America Tower in Boca Raton for $45M
Grover Corlew buys Bank of America Tower in Boca Raton for $45M
The partially collapsed 12-story Champlain Towers South condo building (Getty)
Inside the tug-of-war over the Surfside condo site’s future
Inside the tug-of-war over the Surfside condo site’s future
Moishe Mana and the downtown parking lot he purchased (Google Maps, Getty)
Moishe Mana expands downtown Miami assemblage with $12M purchase
Moishe Mana expands downtown Miami assemblage with $12M purchase
T-Mobile store logo (Getty) and 4850 Northwest 103rd Avenue in Sunrise, Florida (Google Maps)
Des Moines investment firm pays $26M for T-Mobile data center in Sunrise
Des Moines investment firm pays $26M for T-Mobile data center in Sunrise
(Photos courtesy of Miami Historic Preservation, Smith Aerials, Colliers)
Development site near MiamiCentral hits the market
Development site near MiamiCentral hits the market
Alliance Residential Company CEO Bruce Ward and 6595 Morikami Park Road (Google Maps)
Alliance Residential buys site, scores $46M construction loan for senior apartments in Delray Beach
Alliance Residential buys site, scores $46M construction loan for senior apartments in Delray Beach
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...