Private prison operator reports drop in profits
The nation’s biggest private operator of prisons and jails in the U.S. reported a drop in adjusted funds from operations during the second quarter compared with a year ago.
CoreCivic, formerly the Corrections Corp. of America (CXW), on Monday said it had adjusted funds from operations of $56 million, or 46 cents per share, in the period, compared with $67.8 million, or 56 cents per share, in the second quarter of 2020
Funds from operations is a closely watched measure in the REIT industry. It takes net income and adds back items such as depreciation and amortization.
The company said it had net income of $15.6 million, or 13 cents per share, down from $22.2 million, or 18 cents per share, in the previous year.
The prison operator, based in Brentwood, Tennessee, posted revenue of $464.6 million in the period, missing Street forecasts. Three analysts surveyed by Zacks expected $466.1 million.
CoreCivic ended its management of Hamilton County’s Silverdale Detention Center and jail at the end of 2020 in a dispute over per diem fees.
The company’s shares have risen 63% since the beginning of the year. In the final minutes of trading on Monday, shares hit $10.69, a climb of 22% in the last 12 months.
“Our business remains resilient and our cash flows are stable,” said Damon T. Hininger, president and CEO of CoreCivic. “During the quarter we continued to make meaningful progress on our capital allocation strategy to extend debt maturities, reduce overall debt leverage and improve our credit profile through the sale of our non-core real estate assets and our issuance of unsecured bonds in April.”
U.S. job openings hit a record in June
U.S. employers posted a record 10.1 million job openings in June, another sign that the job market and economy are bouncing back briskly from last year’s coronavirus shutdowns.
The Labor Department reported Monday that job openings rose from 9.5 million in May. Employers hired 6.7 million workers in June. The gap between openings and hiring suggests that firms are scrambling to find workers.
A record low 1.3 million people were laid off or fired in June.
The U.S. economy has rebounded with unexpected strength as the roll out of vaccines allows businesses to reopen or expand hours and encourages cooped-up consumers to get out again and visit restaurants, bars and shops. Still, the fast-spreading delta variant has cast a shadow over the outlook.
Boston Fed president favors autumn dial back
The president of the Federal Reserve Bank of Boston added his voice to a growing number of people, inside and outside the Fed, who say the central bank should soon begin to dial back its extraordinary aid for an economy that is strongly recovering from the pandemic recession.
Eric Rosengren said in an interview with The Associated Press that the central bank should announce in September that it will begin reducing its $120 billion in purchases of Treasury and mortgage bonds “this fall.”
The bond buying, which the Fed initiated after the coronavirus erupted in March of last year, has been intended to lower longer-term interest rates and encourage borrowing and spending.
– Compiled by Dave Flessner