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BOCA RATON - The GEO Group, Inc. (NYSE:GEO) reported a substantial increase in third-quarter profit, primarily driven by gains from asset sales, while announcing an expanded share repurchase program. According to InvestingPro data, GEO trades at a P/E ratio of 27.01 but appears undervalued based on Fair Value estimates, suggesting potential upside for investors tracking this correctional facilities operator.
The private prison operator posted net income of $173.9 million, or $1.24 per diluted share, for the third quarter of 2025, compared to $26.3 million, or $0.19 per diluted share, in the same period last year. The results included a $232.4 million pre-tax gain from asset divestitures.
Excluding one-time items, adjusted net income was $35.0 million, or $0.25 per diluted share, up from $29.1 million, or $0.21 per diluted share, a year earlier. Revenue rose to $682.3 million from $603.1 million in the third quarter of 2024.
GEO's board increased the company's share repurchase authorization to $500 million and extended the program through December 2029. During the third quarter, the company repurchased approximately 1.97 million shares at an aggregate cost of $41.6 million. InvestingPro data shows GEO does not currently pay a dividend to shareholders, focusing instead on buybacks despite the stock having fallen 44.65% over the past six months.
The company completed the sale of its 2,388-bed Lawton Correctional Facility to the State of Oklahoma for $312 million and sold the 139-bed Hector Garza Reentry Center in Texas for $10 million. GEO used part of the proceeds to purchase the 770-bed Western Region Detention Facility in San Diego for approximately $60 million.
For the fourth quarter of 2025, GEO expects GAAP net income between $0.23 and $0.27 per diluted share on revenues of $651 million to $676 million. For the full year 2025, the company forecasts GAAP net income of $1.81 to $1.85 per diluted share. This aligns with InvestingPro data showing analysts expect EPS of $0.91 for fiscal 2025, with the company generating $2.45 billion in revenue over the last twelve months.
The company reported it has reduced its net debt by approximately $275 million during the first nine months of 2025, with net leverage at approximately 3.2 times adjusted EBITDA. Financial health metrics from InvestingPro indicate GEO maintains a debt-to-equity ratio of 1.29 and a current ratio of 0.9, suggesting short-term obligations exceed liquid assets. The company's comprehensive Pro Research Report, available among 1,400+ US equities on InvestingPro, provides deeper insights into its financial position.
GEO noted that it has entered into new or expanded contracts representing over $460 million in new incremental annualized revenues that are expected to normalize in 2026, which it described as the largest amount of new business won in a single year in the company's history.
This article is based on a press release statement from The GEO Group.
In other recent news, Geo Group Inc. reported impressive earnings for the second quarter of 2025, with earnings per share reaching $0.22, surpassing analyst expectations of $0.17. The company's revenue also exceeded projections, totaling $636.2 million compared to the anticipated $621.99 million. Additionally, Geo Group announced a joint venture agreement to manage the North Florida Detention Facility, a 1,310-bed facility in Baker County, Florida. Specific details regarding the terms of this joint venture were not disclosed.
The company also secured a significant contract renewal for its subsidiary, BI Incorporated, from U.S. Immigration and Customs Enforcement (ICE). This two-year contract, part of the Intensive Supervision Appearance Program, includes an initial one-year term starting October 1, 2025, followed by an optional one-year period. In legal developments, Geo Group faced a denial from the United States Court of Appeals for the Ninth Circuit regarding a rehearing in cases related to Washington State minimum wage laws for detainees. Six judges dissented from the denial of rehearing en banc.
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