GEO - GEO Group stock plummets after FY23 sales outlook disappoints

Geo Group ( NYSE: GEO ) shares dropped as much as 13.6% in Tuesday morning trading as investors priced in the private prison operator's 2023 revenue guidance with a midpoint that missed Wall Street expectations. Still, the company turned in stronger-than-expected sales for the fourth quarter.

Revenue is expected to be $2.37B-$2.47B in 2023, versus $2.47B consensus (comprised of 3 analyst estimates). It expects full-year adjusted EBITDA to be $500M-$540M.

Its FY23 outlook reflected no assumption for the potential reactivation of its currently idle facilities, which total around 11,000 secure services beds and 2,000 reentry beds. The guidance also highlighted assumptions for higher labor, medical, and food expenses due to continued inflationary trends.

For Q1, GEO called for sales of $605M-$610M, compared with the $612.28M consensus (2 analyst estimates). And adjusted EBITDA is targeted to be $127M-$132M.

Turning to Q4 2022 results , adjusted FFO per share of $0.58 slipped from $0.60 in Q3 and from $0.66 in the year-ago quarter.

Q4 revenue of $620.7M, topping the average analyst estimate of $604.40M, rose from $616.7M in the prior quarter and from $557.54M in Q4 2021.

Operating expenses were $430.57M, down from $436.2M in Q3 and up from $395.99M in the year-earlier period.

Adjusted EBITDA came in at $145.48M vs. $136.2M in Q3 and $124.05M in Q4 2021.

Earlier, GEO Group beats Q4 top and bottom line estimates .

For further details see: