The Associated Press
NEW YORK — Shares of private prison operator Corrections Corp. of America rose Tuesday after the company’s first-quarter profit and revenue surpassed expectations, as demand for its facilities grew.
The Nashville, Tenn., company’s profit grew 7 percent, to 28 cents per share, a penny above Wall Street estimates. Revenue increased 11 percent, and edged out analyst expectations.
Corrections Corp. maintained its full-year profit forecast, and said it is expanding the design of a facility in Adams County, Miss., which is currently under construction. The company now plans 2,232 beds for the facility, up from 1,668. Bed availability increased 7 percent in the first quarter.
Shares advanced $1.03, or 4 percent, to $26.80.
Banc of America analyst T. C. Robillard said prices and demand are strong. The expansion of the Adams County facility should lead to larger profits and profit margins starting in the second quarter and continuing into 2009, he said.
Robillard kept a “Buy” rating on Corrections Corp. shares, with a price target of $35. He said the company is his top pick in the sector.