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Consolidation of game makers driven by uncertain future

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Casino Earnings Report - 8.5.14

August 04, 2014 7:11 PM by Ray Poirier

Casino Earnings Report from WYNN, BYD, IGT and moreWynn Resorts Ltd. (WYNN)

Investors expected a modest decline in Macau gaming revenues, as companies involved there reported quarterly earnings, but few expected such a major surge in Las Vegas Strip gaming. And, that’s what really helped Wynn Resorts Ltd. (WYNN).

In its report last week, WYNN said its Macau revenues totaled $307 million, far less than the consensus figure of $343 million. But the two properties in Las Vegas came to the rescue with revenues of $160 million, easily topping the consensus of $127 million.

In total, the company said revenues were $1.4 billion as against last year’s $1.33 billion. Net income was $203.9 million or $2.12 per share. Last year, income was $129.8 million or $1.28 per share.

Initially, the company’s shares rose substantially, hitting $218.789 in afternoon trading on Tuesday. Those prices changed as the week went on, affected as were all stocks by a major sell-off as the weekend approached.

By closing on Friday, WYNN shares were selling at $210.04 each.

Boyd Gaming Corp. (BYD) 

Saying its second quarter results were “below expectations,” Boyd Gaming Corp. (BYD) said its net income had fallen to $700,000 or $0.01 per share compared to last year’s $11.6 million or $0.13 per share.

The income was affected by a 2.2 percent decline in total revenues that only reached $722.5 million. The company said more serious decline was experienced in midwest and southern regional properties.

“Despite a tough operating environment,” said CEO Keith Smith, “we remain diligently focused on improving our performance and generating long-term growth.”

A bright spot, said the company, was the Borgata Hotel/Casino and Spa in Atlantic City. There, revenues increased 5.2 percent to $181.9 million. That included $6.7 million in online gaming revenues.

International Game Technology (IGT)

Poor product sales that were down 36% from last year didn’t keep International Game Technology (IGT) from showing a modest increase in profit during its third fiscal quarter.

Revenues fell to $467.6 million, a 19 percent drop, but income moved up to $72.1 million or $0.29 per share. Last year, the net income was $65.7 million or $0.25 per share.

The improvement, according to a statement issued by CEO Patti Hart, resulted from “effective cost management.”

The revenue announcement came several weeks after the company announced it was being purchased by GTECH for $6.4 billion, including debt.

GTECH

The Italian company that is acquiring IGT, GTECH, now based in Milan, Italy, reported a 1.4 percent drop in revenues to 751.1 million euros and a 2.4 percent decline in income to 266.6 million euros.

The company said it was hit by lower sales and a strong comparison period last year that was boosted by a significant order in Canada.

Despite the decline, the company said it was sticking to its previous guidance of higher revenues and core earnings ranging between 1.06 billion euros to 1.1 billion euros.

Ray Poirier is the longtime executive editor at GamingToday.

Contact Ray at RayPoirier@GamingToday.com.

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