President Trump has made a crackdown on illegal immigrants and migrants in the U.S. a central part of his second term, just as he did during his first term.
Perhaps responding to Republican attacks that he did not live up to his promises on immigration during his first term, Trump has been much more forceful this time around, with authorities even rounding up immigrants who are in the U.S. legally.
For private prison firm Geo Group (GEO), which has a market cap of nearly $3.9 billion, Trump’s immigration crackdown could prove to be lucrative for its business.
Geo Group CEO David Donahue said on the company’s Q1 earnings call that the company has “an unprecedented opportunity to assist the federal government in meeting its expanded immigration enforcement priorities.”
The company has made a $70-million investment in order to expand its detention capacity, secure transportation, and deliver electronic monitoring services to the U.S. Immigration and Customs Enforcement (ICE).
Donahue noted that Geo Group was awarded a 15-year contract in Q1 by ICE to provide a federal immigration processing center at its 1,000-bed facility in New Jersey.
The contract could generate $60 million in annualized revenues, according to Donahue.
The company is also negotiating a multi-year contract with ICE to provide similar services at its 1,800-bed facility in Michigan, which Donahue said could generate in excess of $70 million in annualized revenues.
The company anticipates additional contracts to be awarded in the second quarter.
Once these are secured, Donahue said the total revenue from its work with ICE could generate annual revenues of $500 million to $600 million.
Geo Group’s GPS tracking technology is also being heavily utilized by ICE to track down immigrants, making the company one of the “big business winners” of the Trump administration’s immigration policies, according to The New York Times.
The company provides its GPS tracking to ICE for its Intensive Supervision Appearance Program (ISAP), which Donahue said on the earnings call could generate $250 million in annualized revenues.
Geo Group’s role in the Trump’s administration’s immigration crackdown has gotten blowback from liberal lawmakers in the U.S., including Democratic Rep. Alexandria Ocasio-Cortez, who accused the administration of “funneling money to private prison companies.”
“This is what it’s all about,” she said in an Instagram Live post on Sunday. “You can literally look up the stock prices for Geo Group and CoreCivic and look at their stock prices since the election.”
Geo Group jumped 60.3% in November, rising from $15.30 to $28.51. CoreCivic gained 33.6%, going from $15.90 to $22.33. Trump was elected president on Nov. 5. As of Thursday’s close, Geo Group was trading at $26.90.
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