By Victoria Albert and Elizabeth Findell

Private-prison companies have banked on a windfall from President Trump's immigration crackdown. They are still waiting.

Trump's campaign promise to carry out the largest domestic deportation operation in American history sent shares soaring at GEO Group and CoreCivic, the two major players in private immigration detention.

Both companies have signed new detention facility contracts with Immigration and Customs Enforcement since Trump's inauguration. But the real payload -- funds from an expected multitrillion-dollar tax and spending bill -- is still working its way through Congress, keeping revenue tethered for now to the churn of government bureaucracy.

The companies this week reported a small decline in revenue in the latest quarter, compared with a year earlier, when Joe Biden was still the president. On an earnings call, GEO Group executives called this year a "tale of two halves," saying the company's payday will come once ICE has more funding.

The private detention companies run facilities that they contract out to state and federal agencies, including ICE. They also transport detainees. Each said they are investing tens of millions of dollars to prepare for an expected influx of ICE contracts, which currently make up roughly 43% of GEO Group's revenue and 21% of CoreCivic's.

ICE currently has a budget shortfall it is hoping to plug through the spending bill. It will need a large cash infusion before it can open new detention centers or significantly expand existing ones.

Republican lawmakers have been working for months to pass President Trump's "big, beautiful" tax and spending package. They are using a process called budget reconciliation, which lets the GOP push the measure through without needing Democratic votes but leaves them vulnerable to Republican dissenters.

So far, the House Judiciary Committee has voted to appropriate $45 billion to ICE for immigrant detention to be used through September 2029. That number isn't expected to be controversial among Republicans, but the package won't reach Trump's desk until intraparty fights over other issues, such as Medicaid and spending cuts, are resolved.

House Republicans are hoping to get the full bill approved by Memorial Day, with the goal of having it on Trump's desk by July 4, though that timeline is far from guaranteed.

A slow start

While immigration arrests have increased, the Trump administration has been slow to ramp up the deportations that were a hallmark of the president's campaign. Daily deportations during Trump's first 100 days were fewer than the average during the final year of the Biden administration.

How the new administration balances detention and release will also impact the companies' bottom lines. GEO Group currently has an exclusive contract with ICE for electronic monitoring services, such as GPS bracelets and smartphone applications, that are used for immigrants who aren't detained during their proceedings. Usage has dropped in recent years, from a high of roughly 370,000 in 2022 to about 185,000.

Trump has promised to prioritize deporting immigrants who have committed crimes.

"If your intent is to go after that criminal element, then the funding would seem to want to go toward that, as opposed to going toward putting more people on ankle bracelets," said Joe Gomes, Noble Capital Markets managing director of equity research.

GEO Group said its current monitoring contract expires on July 31. CoreCivic said it also plans to bid.

High hopes

Both GEO Group and CoreCivic raised their guidance for the full year, saying they expect more contracts once ICE's funding has been settled. The companies said they have thousands of idle beds they could quickly provide to the agency.

Their optimism comes in part from the Laken Riley Act, a law passed in January that requires the detention of a wider range of people who are in the U.S. illegally. Between the law's requirements and Trump's overall immigration push, GEO Group CEO J. David Donahue said ICE could need roughly double, or even triple, the amount of detention-center beds it is using now.

GEO Group has already secured two new ICE contracts this year: a 15-year contract for a 1,000-bed facility in Newark, N.J., and for an 1,800-bed facility in Baldwin, Mich. The facilities are expected to generate more than $130 million in annualized revenue, the company said. It valued the New Jersey contract alone at $1 billion.

CoreCivic also reported several new initiatives with ICE, including preliminary contracts for a roughly 1,000-bed facility in Kansas and a 2,560-bed facility in California, as well as a reopening of a 2,400-bed facility in Dilley, Texas.

"Never in our 42-year company history have we had so much activity and demand for our services as we are seeing right now," said CoreCivic CEO Damon Hininger.

Write to Victoria Albert at victoria.albert@wsj.com and Elizabeth Findell at elizabeth.findell@wsj.com

(END) Dow Jones Newswires

May 08, 2025 18:30 ET (22:30 GMT)

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