GEO Group (NYSE: GEO) reported Q4 EPS of $0.33, $0.07 better than the analyst estimate of $0.26. Revenue for the quarter came in at $578.1 million versus the consensus estimate of $575.97 million.

George C. Zoley, Chairman and Chief Executive Officer of GEO, said, “During the fourth quarter of 2020, our operating divisions continued to face challenges associated with the global COVID-19 pandemic. We remain grateful for our frontline employees, who have continued to make daily sacrifices and have remained committed to providing high-quality services and humane and compassionate care to all those entrusted to our facilities and programs. Despite the challenges associated with COVID-19 and the current political environment, we believe that our company remains resilient and is supported by long-term real estate assets and contracts entailing essential government services.

We recognize that heightened political rhetoric has led to the mischaracterization of our role as a government services provider and has created concerns regarding our future access to financing. We are aware of the importance of allocating capital to pay down debt in the current environment, and our Board has taken steps to reduce our quarterly dividend payments in order to apply our excess cash flows toward debt repayment. We remain committed to balance our continued creation of value for our shareholders with prudent management of our balance sheet.”

GUIDANCE:

GEO Group sees FY2021 EPS of $0.88-$0.98, versus the consensus of $1.31. GEO Group sees FY2021 revenue of $2.24-2.27 billion, versus the consensus of $2.43 billion.

2021 Financial Guidance

• FY21 Revenues of $2.24-$2.27 Billion
• FY21 Net Income Attributable to GEO of $0.88-$0.98 per diluted share
• FY21 AFFO of $1.98-$2.08 per diluted share
• FY21 Adjusted EBITDA of $386-$400 Million

We have issued our financial guidance for the full year and first quarter of 2021. The global COVID-19 pandemic continues to have a negative impact on several segments of our company and has resulted in lower occupancy levels at several of our facilities and programs. We also continue to incur increased spending on personal protective equipment, diagnostic testing, medical expenses, non-contact infrared thermometers, and increased sanitation measures as a result of the global COVID-19 pandemic.

Our guidance assumes the continued negative impact of the global COVID-19 pandemic in the first part of 2021 with a slow recovery throughout the year toward more normalized operations by year-end. Our guidance reflects the previously announced expiration of three of our secure services contracts with the BOP during the first quarter of 2021. Our guidance also reflects the potential non-renewal of three additional secure services contracts with the BOP, which have contract option periods that expire during 2021, as a result of President Biden’s Executive Order and the decline in federal prison populations.

For the full year 2021, we expect Net Income Attributable to GEO to be in a range of $0.88 to $0.98 per diluted share; AFFO to be in a range of $1.98 to $2.08 per diluted share; and Adjusted EBITDA to be in a range of approximately $386 million to $400 million. We expect full year 2021 revenues to be in a range of approximately $2.24 billion to $2.27 billion.

For the first quarter 2021, we expect Net Income Attributable to GEO to be in a range of $0.18 to $0.20 per diluted share and AFFO to be in a range of $0.48 to $0.50 per diluted share on quarterly revenues expected to be in a range of $579 million to $584 million.

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