Geo Group (NASDAQ:GEO), owner-operator of a chain of prisons, plunged in Tuesday afternoon trading thanks to a disappointing outlook. Geo delivered solid revenue results. It brought in $620.7 million, which was up 11%, and beat analyst consensus, which looked for $604.4 million. In addition, Geo’s earnings per share figures came in at $0.34, which beat analysts’ expectations of $0.25 per share.
Geo made a particular show of pointing out its debt burden reduction, which is down from its original $2.64 billion to its current $1.98 billion. Nevertheless, that’s still a pretty hefty slug of debt left in a rapidly-rising interest-rate environment. It’s working at reducing expenses as well, but only having mixed success. Its operating expenses came in at $430.57 million. That’s less than they were in the third quarter when they were $436.2 million. But they’re up significantly from the same time in 2021 when they were $395.99 million.
Looking forward, management expects revenue and adjusted EBITDA for Fiscal Year 2023 to be in the ranges of $2.37 billion to $2.47 billion and $500 million to $540 million, respectively. For reference, analysts were expecting $2.47 billion in revenue.
Among those not dissuaded by how things are going at Geo Group so far are hedge funds. Michael Burry with Scion Asset Management was seen picking up Geo Group shares as recently as last November. Other hedge funds are also behind Geo Group, as the current confidence sentiment is Very Positive. In fact, hedge funds added 1.4 million shares to their positions in the last quarter.