Corrections Corp. of America Earnings Preview

Motley Fool Staff
Updated

Corrections Corp. of America (NYS: CXW) will try to beat its earnings estimates for the fifth consecutive quarter. The company will unveil its latest earnings on Wednesday, Aug. 3. Corrections Corp. of America is an owner and operator of privatized correctional and detention facilities and a prison operator in the United States behind only the federal government and three states.

What analysts say:

  • Buy, sell, or hold?: Analysts strongly back Corrections Corp. of America, with four of six rating it a buy and the remainder rating it a hold. Analysts don't like Corrections Corp. of America as much as competitor Geo Group overall. That rating hasn't budged in three months, as analysts have remained steadfast in their opinion of the stock.

  • Revenue forecasts: On average, analysts predict $431.5 million in revenue this quarter. That would represent a rise of 2.9% from the year-ago quarter.

  • Wall Street earnings expectations: The average analyst estimate is earnings of $0.37 per share. Estimates range from $0.36 to $0.39.

What our community says:
CAPS All-Stars are solidly behind the stock, with 94.4% awarding it an "outperform" rating. The community at large concurs with the All-Stars, with 94.7% assigning it a rating of "outperform." Fools are gung-ho about Corrections Corp. of America and haven't been shy with their opinions lately, logging 139 posts in the past 30 days. Even with a robust four out of five stars, Corrections Corp. of America's CAPS rating falls a little short of the community's upbeat outlook.

Management:
Corrections Corp. of America's profit has risen year over year by an average of 5.9%. Revenue has now gone up for three straight quarters.

Now let's look at how efficient management is at running the business. Traditionally, margins represent the efficiency with which companies capture portions of sales dollars. The following table shows gross, operating, and net margins over the past four quarters.

Quarter

Q1

Q4

Q3

Q2

Gross Margin

30.8%

31.6%

31.6%

29.9%

Operating Margin

19.5%

20.2%

19.9%

18.3%

Net Margin

9.4%

10.1%

9.8%

8.7%

One final thing: If you want to keep tabs on Corrections Corp. of America's movements, and for more analysis on the company, make sure you add it to your Watchlist.

At the time thisarticle was published Motley Fool newsletter services have recommended buying shares of Corrections Corp. of America.Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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