Casino Earnings Reports

Nov 4, 2013 7:10 PM

Troubles for casino giant Caesars Entertainment Corp. (CZR) continued last week as the company reported a third quarter loss of $761.4 million or $6.03 per share. This compared with the previous year’s loss of $505.6 million or $4.03 per share.

Fewer visitors at many of the company’s gambling properties resulted in a decline of 7 percent in casino revenue, the company said.

As for its Las Vegas operations, the company said revenue rose about 5 percent to $773.5 million.

The poor quarterly showing came on the heels of an announcement that the company was forced to back out of a planned partnership with Suffolk Downs in East Boston, Massachusetts, for a casino license because of an investigators’ report indicating the company would not pass muster for several different reasons.

Also, the company was cited by the International Revenue Service “for a range of Bank Security Act violations.” They reportedly took place at the company’s Las Vegas flagship, Caesars Palace Resort and Casino.

Through it all, the company continued to work on its financial restructuring. The company said private equity firms Apollo Global Management and TPG Global are adding to their investment in the spin off company called Caesars Acquisition Co. Their total investment now comes to about $600 million, Caesars said.

As for the company’s debt of more than $23.5 billion, it was being reported several deals were being reviewed that would keep the two major investors involved without losing equity through a bankruptcy filing.

MGM

Increased revenues in Macau and from the casinos on the Las Vegas Strip helped MGM Resorts International reduce its loss during the third fiscal quarter.

The company reported the loss during the period fell to $31.2 million or $0.07 a share compared to the loss of $181.2 million or $0.37 per share recorded last year.

Total revenues rose 9 percent to $2.46 billion, helped considerably by the 22 percent rise in revenues at MGM Macau. There, revenues totaled $808 million. Still, analysts had expected profits to be slightly higher.

MGM Macau profit was shared by Pansy Ho, the co-founder of the casino, who now owns a 27 percent stake in the casino.

In Las Vegas, the company said revenue per available room increased 3 percent with the average daily room rate reaching $127 from the previous $124. Occupancy on the Las Vegas Strip rose 1 percent to 93 percent.

Boyd Gaming

Wall Street didn’t look kindly on Boyd Gaming Corp. (BYD) shares last week following the company’s report that the loss during the third quarter was deeper than what had been expected.

The company said it lost $37.3 million or $0.37 per share during the period that ended on Sept. 30. This compared with last year’s loss of $15.8 million or $0.08 per share.

Following the announcement, the company’s shares dropped 19 percent to $10.56 per share. According to Bloomberg News, the decline was the sharpest since 2001.

The quarter started out just fine, said CEO Keith Smith. He said the company showed increases in both July and August. Come September, however, weaker economic conditions caused a major drop in business at the company’s 22 casinos across the country.

Including revenue at several properties acquired during the year, total revenue rose 21 percent to $738.6 million. Analysts had forecast total revenue of $757 million.

Bally Tech

Gaming machine and systems provider Bally Technologies Inc. (BYI) reported record profits during the first fiscal quarter with revenues surging to $249.3 million and earnings reaching $57 million or $0.97 per share.

During the 2012 comparable quarter, earnings were $53.6 million or $0.77 per share while revenues were $235.2 million.

Helped by a 12 percent increase in revenues from its installed base of machines, the company’s gaming operations rose 12 percent to $102 million. Showing a 48 percent jump in revenues to $76 million was the company’s systems divisions, the company said.

Describing customer response as being “encouraging,” CEO Ramesh Srinivasan said the company had introduced “seven new wide-area progressive titles” at last month’s Global Gaming Expo.

As for growth, the company noted it expected to close on its $1.3 billion acquisition of SHFL entertainment by the end of the calendar year.

The company said one of its board members, Kevin Verner, had resigned to accept an assignment as a consultant to oversee the integration of SHFL titles into the company’s portfolio following the SHFL acquisition.

Churchill Downs

Another gaming company that reported a successful quarter was Churchill Downs Inc. (CHDN), the company that previously concentrated exclusively on operating horse tracks but has since expanded into casino gambling.

The company said its third quarter revenues grew 13 percent to $185.6 million from last year’s $160.9 million, while earnings reached $9.2 million or $0.51 per share, topping last year’s $6 million of earnings or $0.34 per share.

Ray Poirier is the longtime executive editor at GamingToday.

Contact Ray at [email protected].

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