GEO - GEO Group stock slides after Q1 earnings fall poor outlook

2023-04-25 09:47:22 ET

Geo Group ( NYSE: GEO ) stock tanked 5.8% in Tuesday premarket trading after the private prison operator's first-quarter earnings aligned with Wall Street expectations and dropped from a year ago. Also, the company delivered its Q2 revenue guidance below estimates as higher interest rates weighed.

Also for the full year, revenue is expected to be $2.38B-$2.46B, vs. $2.46B consensus, compared with $2.37B-$2.47B in the prior view. It sees adjusted EBITDA of $507M-$537M, narrowing from the $500M-$540M target range issued in mid-February.

For the second quarter, GEO called for revenue of $585M-$590M, down from the $611.3M consensus. And adjusted EBITDA is anticipated to be $124M-$129M.

Q1 adjusted EPS of $0.22 fell from $0.31 in the year-earlier period. Revenue of $608.2M, surpassing the average analyst estimate of $606.1M, dipped from $620.7M in the prior quarter and rose from $385.2M a year earlier.

Operating expenses were $422.5M, down from $430.6M in Q4 2022 and up from $385.2M a year before.

Adjusted EBITDA stood at $130.9M vs. $145.5M in Q4 2022 and $125.2M in Q1 2022.

"During the first quarter of 2023, we reduced our net debt by approximately $70 million," said Executive Chairman George C. Zoley. "Our goal remains to reduce our net leverage to below 3.5 times Adjusted EBITDA by the end of 2023 and to below 3 times Adjusted EBITDA by the end of 2024."

Earlier, GEO Group Non-GAAP EPS of $0.22 in-line, revenue of $608.2M beats by $2.13M .

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