CoreCivic 2025 Q1 Earnings Net Income Surges 163%
Thursday, May 8, 2025 4:31 am ET
54min read CoreCivic (CXW) reported its fiscal 2025 Q1 earnings on May 7, 2025. Despite a 2.4% year-on-year revenue decline to $488.6 million, CoreCivic surpassed Wall Street’s revenue estimates by 2.5%. The company raised its full-year guidance, projecting an EPS of $0.83 to $0.92, up from $0.48 to $0.61 previously. This adjustment reflects strong Q1 performance, increased occupancy, and significant contract reactivations with ICE, highlighting optimism for the year ahead.
Revenue
CoreCivic's revenue for Q1 2025 saw a 2.4% decrease, totaling $488.6 million compared to $500.7 million in Q1 2024. The Safety segment generated $454.18 million, followed by the Community segment at $29.71 million. The Properties segment contributed $4.64 million, while other sources added $93,000. Overall, the revenue reflects a modest decline but exceeded analysts' expectations.
Earnings/Net Income
CoreCivic's EPS showed significant growth, rising 187.5% to $0.23 in Q1 2025 from $0.08 in Q1 2024. Net income increased by 163.2% to $25.11 million from $9.54 million in the previous year. The improved EPS indicates a positive trend in earnings performance.
Price Action
The stock price of CoreCivic edged down 0.57% during the latest trading day and declined 0.18% over the most recent full trading week. However, it surged 16.43% month-to-date.
Post-Earnings Price Action Review
Investors adopting a strategy of purchasing CoreCivic shares following a quarter-over-quarter revenue drop and holding for 30 days have experienced poor returns over the past five years. This approach yielded a return of -14.79%, significantly underperforming the benchmark return of 84.08%. The excess return stood at -98.88%, with a compound annual growth rate (CAGR) of -3.16%, indicating substantial losses. The strategy also suffered from a high maximum drawdown of -31.26% and a Sharpe ratio of -0.20, reflecting considerable risk and negative returns. This analysis underscores the challenges investors face in utilizing this strategy for CoreCivic shares, emphasizing the need for cautious and informed decision-making in the context of revenue fluctuations.
CEO Commentary
CoreCivic's CEO, Damon T. Hininger, reported a strong start to 2025 with a rise in first-quarter occupancy to 77.0% from 75.2% a year prior. The company exceeded internal expectations through effective cost management and increased utilization, especially with ICE. Hininger highlighted the reactivation of three previously idle facilities under ICE agreements and anticipates further contracting activities throughout the year. Ongoing investments in idle facilities aim to meet partners' needs, prompting an increase in the company's annual financial guidance.
Guidance
CoreCivic expects continued contracting activity in 2025, engaging in discussions with federal and state partners about capacity needs. The company has allocated $40 million to $45 million for capital investments in facility activations and transportation services, having spent $12 million already. An additional $25 million is approved to expand facilities beyond initial priorities, indicating preparedness for increased demand.
Additional News
CoreCivic recently announced the appointment of three new independent members to its Board of Directors: Dawn Smith, Stacey Tank, and Nina Tran, effective March 17, 2025. Additionally, the company has accelerated its stock repurchase program, buying back 1.9 million shares for $37.9 million in Q1 2025. Since the program's inception in May 2022, CoreCivic has repurchased 16.5 million shares, with $131 million remaining authorized for buybacks. The company is actively engaging in preparatory investments for facility readiness, anticipating new contracts and expanding its operational capacity.
Revenue
CoreCivic's revenue for Q1 2025 saw a 2.4% decrease, totaling $488.6 million compared to $500.7 million in Q1 2024. The Safety segment generated $454.18 million, followed by the Community segment at $29.71 million. The Properties segment contributed $4.64 million, while other sources added $93,000. Overall, the revenue reflects a modest decline but exceeded analysts' expectations.
Earnings/Net Income
CoreCivic's EPS showed significant growth, rising 187.5% to $0.23 in Q1 2025 from $0.08 in Q1 2024. Net income increased by 163.2% to $25.11 million from $9.54 million in the previous year. The improved EPS indicates a positive trend in earnings performance.
Price Action
The stock price of CoreCivic edged down 0.57% during the latest trading day and declined 0.18% over the most recent full trading week. However, it surged 16.43% month-to-date.
Post-Earnings Price Action Review
Investors adopting a strategy of purchasing CoreCivic shares following a quarter-over-quarter revenue drop and holding for 30 days have experienced poor returns over the past five years. This approach yielded a return of -14.79%, significantly underperforming the benchmark return of 84.08%. The excess return stood at -98.88%, with a compound annual growth rate (CAGR) of -3.16%, indicating substantial losses. The strategy also suffered from a high maximum drawdown of -31.26% and a Sharpe ratio of -0.20, reflecting considerable risk and negative returns. This analysis underscores the challenges investors face in utilizing this strategy for CoreCivic shares, emphasizing the need for cautious and informed decision-making in the context of revenue fluctuations.
CEO Commentary
CoreCivic's CEO, Damon T. Hininger, reported a strong start to 2025 with a rise in first-quarter occupancy to 77.0% from 75.2% a year prior. The company exceeded internal expectations through effective cost management and increased utilization, especially with ICE. Hininger highlighted the reactivation of three previously idle facilities under ICE agreements and anticipates further contracting activities throughout the year. Ongoing investments in idle facilities aim to meet partners' needs, prompting an increase in the company's annual financial guidance.
Guidance
CoreCivic expects continued contracting activity in 2025, engaging in discussions with federal and state partners about capacity needs. The company has allocated $40 million to $45 million for capital investments in facility activations and transportation services, having spent $12 million already. An additional $25 million is approved to expand facilities beyond initial priorities, indicating preparedness for increased demand.
Additional News
CoreCivic recently announced the appointment of three new independent members to its Board of Directors: Dawn Smith, Stacey Tank, and Nina Tran, effective March 17, 2025. Additionally, the company has accelerated its stock repurchase program, buying back 1.9 million shares for $37.9 million in Q1 2025. Since the program's inception in May 2022, CoreCivic has repurchased 16.5 million shares, with $131 million remaining authorized for buybacks. The company is actively engaging in preparatory investments for facility readiness, anticipating new contracts and expanding its operational capacity.
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