The Corrections Corporation of America (CCA) held it's investor's call for the first quarter of 2009 earlier this month. During the call, CCA officials emphasized a positive outlook that drove stock prices to increase by 19% following the conference call.
According to CCA, 9,300 new beds were brought online during 2008 and 2009, and the average daily compensated population increased for the quarter to 4.2% from the the previous year. CCA remains the nation's largest owner and operator of privatized correctional and detention facilities, managing 64 facilities, 44 of them CCA-owned, designed to house approximately 86,000 prisoners.
On the call, company officials informed investors of a 10,000 bed vacancy among current capacity. However, folks at CCA implied the for profit business strategy of building prisons on speculation in anticipation of demanded capacity would positively impact investment.
Specifically, CCA officials mentioned the federal stimulus package's assistance in helping states avoid budget shortfalls should help attract new demand to fill currently vacant beds.
CCA reps are projecting the potential demand may come from the 19 states -- including Texas -- the company currently does business with. According to the company's analysis those states' prison populations will grow in excess of planned capacity past 2013.
It will be interesting to see if CCA's projections bear out. We will keep following the company's contracts particularly those in Texas. Stay tuned...