CoreCivic (NYSE:CXW) stock is falling on Tuesday after the detention center company revealed that the U.S. government has ended a contract with it.
CoreCivic notes that the U.S. government has terminated its contract with the South Texas Family Residential Center in Dilley, Texas. This notification will have the location close in 60 days, which should be on Aug. 9, 2024.
CoreCivic says that this termination introduces uncertainties surrounding its financial guidance. As such, the company is suspending its outlook for 2024. It does note that it expects this to have a negative earnings per share impact of 38 cents to 41 cents for the year.
CoreCivic says it has also notified the facility’s lessor about this change. This allows it to leave the lease after 60 days, which matches the timing of the government contract ending.
How This Affects CXW Stock Today
With this news comes falling prices for CXW stock this morning. That has the company’s shares down 26.2% as of this writing. Investors will also note that the stock was only up 2.4% year-to-date when markets closed yesterday.
CXW stock isn’t seeing heavy trading today despite the contract termination. As of this writing, only about 196,000 shares have changed hands. That’s a far way off from its daily average trading volume of about 762,000 shares.
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On the date of publication, William White did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
