March 09, 2010 7:48 AM
by Ray Poirier
Lower costs and improving business at its Las Vegas properties gave hope to officials of Boyd Gaming Corp. (BYD) as they reported on the fourth fiscal quarter of 2009.
The company said its loss for the period fell to $1 million or $0.01 per share, a substantial improvement, when compared to the fourth quarter of 2008 that saw a loss of $220.8 million or $2.51 per share.
Revenues decreased from last year’s $422.6 million to $384.9 million, slightly less than the analysts’ expectations of $386 million. Expenses were slashed by 42 percent to $367.2 million from last year’s $677.5 million.
“As the economic recovery accelerates, consumer spending will increase, providing us the opportunity to capitalize on our more efficient business model,” the company stated in an accompanying statement.
Still, the company faced a potential downgrade of its debt from Moody’s Investor Service. The company placed Boyd Gaming’s debt under review because it felt that the locals gaming market had not shown a sufficient improvement over the past two years.
Keith Foley, Moody’s senior vice president, said, “Earnings visibility in the Las Vegas locals market remains weak and we are concerned that Boyd may experience a further and significant cash flow decline from that business segment in 2010.”
Still, Keith Smith, Boyd Gaming CEO, said that the company will continue to pursue the purchase of Station Casinos Inc. It has offered to acquire the properties for $2.45 billion.
“That offer still stands,” said Smith.
Smith also noted that Boyd Gaming hold a right of first refusal on any sale of the 50 percent stake MGM MIRAGE Inc. (MGM) holds in the Borgata property in Atlantic City. MGM is in the process of placing that holding in a trust until a buyer is found.
“We are pleased with the 50 percent ownership position in Atlantic City gaming,” Smith said, adding, “it will continue to be business as usual at Borgata.”