Shares of GEO Group Inc (NYSE: GEO) plummeted 8.43% in pre-market trading on Wednesday following the release of its first-quarter 2025 financial results that fell short of analysts' expectations. The prison operator reported earnings that missed estimates and provided a disappointing outlook for the full year, causing investors to reassess the company's growth prospects.

GEO Group announced quarterly adjusted earnings of $0.14 per share, significantly below the analyst consensus estimate of $0.18, representing a 22.22% miss. This also marks a 22.22% decrease from earnings of $0.18 per share in the same quarter of the previous year. The company's revenue for Q1 came in at $604.65 million, falling short of the analyst consensus estimate of $611.81 million by 1.17%.

Despite raising its full-year EPS forecast to $0.77-$0.89, up from the prior outlook of $0.74-$0.88, GEO's guidance still falls considerably short of analysts' expectations of $1.17 per share. The company cited higher overhead and operating expenses, along with increased capital expenditures, as factors impacting the first half of the year. CEO George Zoley remained optimistic, stating, "We believe we have an unprecedented opportunity to assist the federal government in meeting its expanded immigration enforcement priorities." However, the market's reaction suggests investors are concerned about the company's ability to meet growth expectations in the current fiscal year.