Corrections Corporation Of America (CXW) has reported a 9.20 percent rise in profit for the quarter ended Sep. 30, 2016. The company has earned $55.34 million, or $0.47 a share in the quarter, compared with $50.68 million, or $0.43 a share for the same period last year. On the other hand, adjusted net income for the quarter stood at $57.24 million, or $0.49 a share compared with $53.03 million or $0.45 a share, a year ago.
Revenue during the quarter grew 3.26 percent to $474.94 million from $459.96 million in the previous year period. Total expenses were 84.43 percent of quarterly revenues, down from 85.77 percent for the same period last year. This has led to an improvement of 134 basis points in operating margin to 15.57 percent.
Operating income for the quarter was $73.95 million, compared with $65.44 million in the previous year period.
However, the adjusted EBITDA for the quarter stood at $105.74 million compared with $94.79 million in the prior year period. At the same time, adjusted EBITDA margin improved 165 basis points in the quarter to 22.26 percent from 20.61 percent in the last year period.
"I am very proud of the focus our team has maintained in delivering solid third quarter results while securing an important contract extension with Immigration and Customs Enforcement ("ICE") at our South Texas Family Residential Center, and in executing a new contract to address an emergent need of ICE. We have worked diligently to provide dependable, professional service to our government partners," said Damon Hininger, chief executive officer.
For fiscal year 2016, Corrections Corporation Of America forecasts net income to be in the range of $208.20 million to $209.20 million. It projects adjusted net income to be in the range of $212 million to $213 million. It projects diluted earnings per share to be in the range of $1.76 to $1.77. It projects diluted earnings per share to be in the range of $1.80 to $1.81 on adjusted basis for the same period.
For the fourth-quarter, Corrections Corporation Of America forecasts net income to be in the range of $49 million to $50 million. It projects adjusted net income to be in the range of $49.40 million to $50.40 million. It projects diluted earnings per share to be in the range of $0.42 to $0.42. It projects diluted earnings per share to be in the range of $0.42 to $0.43 on an adjusted basis for the same period.
Working capital turns negative
Working capital of Corrections Corporation Of America has turned negative to $41.93 million on Sep. 30, 2016 from positive $50.81 million on Sep. 30, 2015. Current ratio was at 0.88 as on Sep. 30, 2016, down from 1.16 on Sep. 30, 2015.
Days sales outstanding went down to 44 days for the quarter compared with 48 days for the same period last year.
Debt moves up
Corrections Corporation Of America has witnessed an increase in total debt over the last one year. It stood at $1,428.90 million as on Sep. 30, 2016, up 8.25 percent or $108.90 million from $1,320 million on Sep. 30, 2015. Short-term debt stood at $8.75 million as on Sep. 30, 2016. Total debt was 43.49 percent of total assets as on Sep. 30, 2016, compared with 40.61 percent on Sep. 30, 2015. Debt to equity ratio was at 0.99 as on Sep. 30, 2016, up from 0.90 as on Sep. 30, 2015. Interest coverage ratio deteriorated to 4.37 for the quarter from 5.56 for the same period last year.
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