Post Earnings Coverage as CoreCivic Quarterly Revenue Increased 3.6%; Diluted EPS Surged 26.8%
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LONDON, UK / ACCESSWIRE / March 1, 2017 / Active Wall St. announces its post-earnings coverage on CoreCivic, Inc. (NYSE: CXW). The Company announced its fourth quarter fiscal 2016 financial results on February 08, 2017. The Nashville, Tennessee based prison operator exceeded market estimates and also updated its annual earnings and FFO outlook. Register with us now for your free membership at:
One of CoreCivic's competitors within the REIT - Diversified space, VEREIT, Inc. (NYSE: VER), issued, jointly with its operating partnership, VEREIT Operating Partnership, L.P., its 2016 Annual Report on Form 10-K on Thursday, February 23, 2017. AWS will be initiating a research report on VEREIT in the coming days.
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For the three months ended December 31, 2016, CoreCivic reported total revenue of $464.1 million compared to $447.8 million in Q4 2015. The increase in revenue was primarily attributable to the activation of the newly constructed Trousdale Turner Correctional Center in Q1 2016, higher average daily populations from Immigration, and Customs Enforcement across multiple facilities in the Company's portfolio, and the acquisition of 19 residential re-entry facilities from the beginning of Q4 2015 through Q4 2016.
CoreCivic generated net income of $60.7 million, or $0.52 per diluted share, compared to $48.6 million, or $0.41 per diluted share, in Q4 2015. The Company's earnings number surpassed CoreCivic's own guidance range of $0.42 to $0.43, and was $0.09 ahead of consensus estimates.
For Q4 2016, CoreCivic's Funds from Operations (FFO) was $84.6 million, or $0.72 per diluted share, compared to $72.8 million, or $0.62 per diluted share, during Q4 2015. AFFO totaled $0.65 per share, ahead of the Company's prior guidance range of $0.55 to $0.56. CoreCivic reported EBITDA of $119.4 million during Q4 2016 compared to $109.4 million during the year earlier same quarter. Adjusted EBITDA was $110.7 million in Q4 2016 compared to $97.7 million during Q4 2015.
Business Development Update
On October 31, 2016, CoreCivic announced a new contract award to house up to 1,116 ICE detainees at the Company's Cibola County Corrections Center in Milan, New Mexico. The contract contains an initial term of five years, with renewal options upon mutual agreement.
On December 14, 2016, CoreCivic announced a new contract award to house ICE detainees at our Northeast Ohio Correctional Center in Youngstown, Ohio. The new contract contains an initial term expiring March 31, 2017, with three six-month renewal periods at the option of ICE.
During Q4 2015, CoreCivic entered into a new contract with the state of Arizona to house up to an additional 1,000 state inmates at our 1,596-bed Red Rock Correctional Center. The Company previously provided housing for approximately 1,000 offenders at the Red Rock facility under a multi-year contract that commenced in 2014. Construction to expand the facility to 2,024 beds and to add additional space for inmate re-entry programming was substantially completed in December 2016 at a total cost of $37.0 million. The Company began receiving inmates under the new contract during July 2016.
On January 01, 2017, CoreCivic closed on the acquisition of the Arapahoe Community Treatment Center, a 135-bed residential re-entry facility in Englewood, Colorado, for $5.5 million. The acquisition includes a contract with Arapahoe County to provide residential re-entry services for up to 135 residents and complements the Company's existing portfolio of residential re-entry facilities in Colorado, which now represents eight facilities and 740 beds.
Financial Details
CoreCivic had a leverage of 3.4 times and fixed charge coverage of 6.8 times. At December 31, 2016, the Company had $38 million of cash on hand and $456 million of availability on its $900 million revolving bank credit facility and no debt maturities until 2020.
CoreCivic stated that it also had 8,700 beds in idle facilities that provide it with growth potential without the requirement to deploy capital to construct new bed capacity. As of December 31, 2016, CoreCivic had 7 million in capital commitments remaining to complete construction of the Red Rock Facility and programming space at its Northwest New Mexico facility.
On February 17, 2017, CoreCivic announced that its Board of Directors declared a quarterly dividend of $0.42 per share to be paid on April 17, 2017, to shareholders of record as of the close of business on April 03, 2017.
Outlook
For Q1 2017, CoreCivic is forecasting EPS in the range of $0.37 to $0.39. FFO per-share guidance for the first quarter is $0.57 to $0.58, while AFFO per-share guidance is a range of $0.55 to $0.56. For FY17, CoreCivic is projecting EPS in the band of 1.46 to $1.54, up from $1.40 to $1.50 from its prior guidance. The Company's FY17 FFO per-share guidance is a range of $2.22 to $2.30, up from $2.16 to $2.27 from the previous guidance. At full year, AFFO per-share guidance is $2.13 to $2.21 compared to $2.07 to $2.17 in its prior guidance. The Company noted that the increase in its annual 2017 guidance is due to higher occupancy assumptions primarily for the Company's federal populations.
Stock Performance
On Tuesday, February 28, 2017, the stock closed the trading session at $33.70, falling 2.21% from its previous closing price of $34.46. A total volume of 3.18 million shares have exchanged hands, which was higher than the 3-month average volume of 1.70 million shares. CoreCivic's stock price rallied 55.89% in the last three months, 103.39% in the past six months, and 27.13% in the previous twelve months. Furthermore, since the start of the year, shares of the Company have surged 37.78%. The stock is trading at a PE ratio of 18.05 and has a dividend yield of 4.99%.
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