Casino Earnings Reports

May 6, 2013 7:09 PM

Macau’s gambling exuberance has once again separated the major Las Vegas Strip gaming companies from those that win and those that don’t.

MGM Resorts International (MGM) and Las Vegas Sands Corp. (LVS), both with a presence in the Chinese enclave, reported profits for the first fiscal quarter while Caesars Entertainment Corp. (CZR), with only a golf club and no gaming in Macau, reported another loss.

For MGM, earnings of $6.5 million or $0.01 per share was the best quarterly experience the company has had since the beginning of the recession, according to CEO Jim Murren.

Las Vegas Sands said it drew a record number of patrons to its Macau casinos to boost its net income to $572 million or $0.69 per share compared to last year’s earnings of $499 million or $0.61 per share.

Caesars, still troubled by debt exceeding some $21 billion, said it had reduced its quarterly loss to $217.6 million or $1.74 per share from the $280 million loss, $2.24 per share, it experienced in 2012.

Hurt by the slow recovery of Atlantic City from the ravages of Hurricane Sandy, the company said revenue fell 3% to $2.14 billion from $2.21 billion it recorded last year.

Still the company looks forward to improvement with the establishment of the Caesars Growth Partners, a spinoff that will generate an investment of up to $500 million from its majority owners. The new company, that will still be majority owned by CZR, will include Planet Hollywood, Caesars Interactive and possibly other company properties.

Sheldon Adelson said his Macau properties lured 14 million customers to its four casinos during the reporting period. He said he was “cracking the whip” on the construction of the company’s new Cotai-Strip casino, expected to open in mid-2015.

Murren said he was encouraged by the improvement at his Las Vegas properties, especially CityCenter which posted a profit instead of a loss. The company shares ownership of CityCenter with a Dubai firm.

“The economy that we talked about is slowly recovering,” Murren said. He added, “but it could be somewhat fragile. We learned the hard way that we’re very dependent on the U.S. economy.”

Pinnacle Entertainment

Impacted by a major write-down of a Viet Nam investment, Pinnacle  Entertainment Inc. (PNK) reported a first quarter loss of $85.4 million or $1.46 per share. In the comparable quarter of 2012, the company had a loss of $1 million or $0.02 per share.

The write down was its investment in Asian Coast Development (Canada) Ltd. that is involved in a casino project in Viet Nam that has encountered funding problems. During the quarter, PNK took an impairment charge of $92.2 million. Without the charge, the company would have shown earnings of $0.25 per share.

Revenue during the period rose to $312.6 million from last year’s $293 million. Even at that, the company said its properties were affected by the increase in the payroll tax and the delays in the IRS refund checks.

Ameristar Casinos

Without a conference call to explain its first quarter experience, Ameristar Casinos Inc. (ASCA) reported an earnings decline of 57 percent. Net income was $18 million or $0.51 per share compared to the profit of $41.4 million or $1.21 per share reported in 2012.

The company is in the process of being acquired by Pinnacle Entertainment Inc. for $869 million and the assumption of $1.9 billion in debt.

ASCA said that after stripping out acquisition-related expenses and other one-time charges, the earnings for the first quarter were $0.56 per share.

Revenues fell 5 percent to $295.1 million from last year’s $312.1 million.

Ray Poirier is the longtime executive editor at GamingToday.

Contact Ray at [email protected].

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