GEO Group Meets on Revenues, Misses on EPS

Seth Jayson, The Motley Fool
Updated

GEO Group (NYS: GEO) reported earnings on Feb. 21. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended Jan. 1 (Q4), GEO Group met expectations on revenues and missed expectations on earnings per share.

Compared to the prior-year quarter, revenue expanded and GAAP earnings per share dropped significantly.

Gross margins dropped, operating margins expanded, net margins contracted.

Revenue details
GEO Group logged revenue of $406.5 million. The seven analysts polled by S&P Capital IQ expected a top line of $407.1 million on the same basis. GAAP reported sales were 8.6% higher than the prior-year quarter's $374.4 million.

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Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.

EPS details
Non-GAAP EPS came in at $0.39. The seven earnings estimates compiled by S&P Capital IQ averaged $0.40 per share on the same basis. GAAP EPS of $0.30 for Q4 were 19% lower than the prior-year quarter's $0.37 per share.

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Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.

Margin details
For the quarter, gross margin was 24.7%, 30 basis points worse than the prior-year quarter. Operating margin was 12.2%, 480 basis points better than the prior-year quarter. Net margin was 4.6%, 170 basis points worse than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $413.9 million. On the bottom line, the average EPS estimate is $0.37.

Next year's average estimate for revenue is $1.69 billion. The average EPS estimate is $1.66.

Investor sentiment
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on GEO Group is buy, with an average price target of $27.08.

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At the time thisarticle was published Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor ofMotley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. Try any of our Foolish newsletter services free for 30 days. We Fools may not 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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