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Cornell 3rd-qtr profit up 39 percent as expansion, higher populations drive revenue up
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HOUSTON - Prison and treatment services operator Cornell Cos. on Thursday said its third-quarter profit shot up 39 percent, driven by higher revenue from expansion and higher populations at its facilities.
For the three months ended Sept. 30, the company reported income available to common shareholders of 6.7 million, or 45 cents per share, compared with $4.8 million, or 32 cents per share, in the year-ago period.
Revenue rose 9 percent to $103.3 million, from $95.2 million last year.
Cornell said much of the revenue increase came from the expansions of two correctional facilities: its Walnut Grove Youth Correctional Facility in Mississippi and Great Plains Correctional Facility in Hinton, Okla., along with higher population at a third, the Regional Correctional Center in Albuquerque, N.M.
Average contract occupancy levels for residential facilities were 90.6 percent, compared with 90 percent in last year's third quarter. The number of contracted beds in operation rose 3 percent to 17,480, while the number of personnel days billed rose 8 percent to 1.63 million.
Cornell said it started up operations at its Hudson Correctional Facility in Colorado on Sept. 30, sooner than previously planned, because of a new contract with the Alaska Department of Corrections. Start-up costs are expected to lead to charges of 11 cents to 12 cents per share in the fourth quarter, it said.
As a result, management now expects fourth-quarter earnings to range from 32 cents to 35 cents per share, down from a prior forecast of 42 cents to 46 cents per share. For the full year, the company now expects profit of $1.60 to $1.63 per share, down from its previous guidance for earnings of $1.68 to $1.76 per share.
Cornell shares rose 60 cents, or 2.6 percent, to close Thursday at $23.76.
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