Solid 3Q earnings boosts Boyd Gaming

Nov 8, 2005 4:40 AM

It was a busy week for gaming companies with some of the larger companies reporting on their financial results for the third quarter that ended on Sept. 30. But when the analysts had finished listening to conference calls, it was Boyd Gaming Corp. (BYD) that received the most favorable response from investors.

Wall Street had expected Boyd Gaming to show the impact of hurricane damage in Louisiana but a 50% increase in earnings per share over the 2004 result boosted the confidence of investors who on Friday pushed the share price by $3.78 to $46.95.

Adjusted earnings, which excluded the costs of early debt retirement and hurricane expenses, rose to $0.57 per share compared to $0.38 per share a year earlier. The figure topped the analysts’ consensus of $0.51 per share.

Particularly impressive was a 10% increase in revenues from the company’s Nevada casinos and strong results from its Atlantic City casino, the Borgata, which saw net revenue increase by 14.7%. The Borgata is 50% owned by both Boyd Gaming and MGM MIRAGE Inc. (MGM).

Harrah’s Entertainment

Benefiting from its acquisition of the Caesars properties, Harrah’s Entertainment Inc. (HET) reported its quarterly profit rose 42% with net income of $169 million compared with $118.8 million in 2004.

Excluding adjustments for special items, however, earnings per share fell to $1.05 down 3.7% from the $1.09 per share achieved in the third quarter a year ago.

For the first nine months of 2005, the company said revenues rose 50.6% to $5.1 billion from the $3.4 billion in 2004. Income from operations was $874.6 million, an increase of 39.7% from last year’s $626.1 million. Net income rose 30.2% to $378.6 million from $290.8 million.

During the third quarter, said Gary Loveman, chairman and CEO, "Our same-store sales growth and cross-market play numbers clearly indicate our customer base is loyal, that our operations are resilient, and that we are realizing our planned acquisition synergies."

Las Vegas Sands

Playing lucky at The Venetian and showing remarkable strength in Macau, Las Vegas Sands Corp. (LVS) was able to produce a 33% improvement in adjusted earnings.

Net revenue for the third quarter was $437.6 million compared to $343.6 million in the third quarter of 2004. Adjusted net income reached $99.9 million or $0.28 per diluted share compared to $68 million or $0.21 per diluted share in 2004.

Table games win percentage during the period in Las Vegas, with a drop of $301.7 million, was 23.9% whereas last year that percentage was 18%. However, slot revenue was slightly lower at $515 million compared to $523 million.

Average daily rate per room was $203 up from $201 a year ago, but occupancy fell from 97.2% to 96.3% thus maintaining a revenue per available room figure of $195, the same as last year.

At the Sands Macau, however, "rolling chip" volume was $3.2 billion in the third quarter, up from $2 billion in the second quarter. There was no comparable figure from 2004. And EBITDAR (earnings before interest, depreciation, amortization and rent) was $90.1 million compared to the third quarter of 2004 when it was $69.2 million.

Casino revenues in Macau reached $240.1 million, an increase of 47.8% over last year while operating income moved up from $63.3 million to $82.2 million.

The company said it had begun an expansion program in Macau with the first phase to open in the first quarter of 2006 "in time for Chinese New Year."

Wynn Resorts

Strong gaming results and even stronger non-gaming revenues helped Wynn Resorts Ltd. (WYNN) reduce its quarterly loss to $8 million or $0.14 per share compared to last year’s loss of $31.6 million or $0.26 per share.

During the period that ended on Sept. 30, net gaming revenue totaled $123 million. Particularly notable was the win per table per day that amounted to $7,321. Win percentage for table games ended at 21.9%. Slots revenue reached $897.1 million based on a win peer unit per day of $251.

Net non-gaming revenues were $128.4 million with room revenue at $61.4 million that resulted from a daily room rate of $264 and occupancy of 93%.

As for the company’s development in Macau, Steve Wynn, chairman and CEO, said that the first phase that includes 600 hotel rooms and about 100,000 square feet of gaming space is expected to open in third quarter of 2006.

Dover Downs

Citing the benefits of converting its slot machines to ticket in/ticket out format, Dover Downs Gaming & Entertainment Inc. (DDE) reported an increase in net earnings of 24.3% for the third quarter that ended on Nov. 30.

Net earnings per diluted share were $0.26 compared to $0.19 per share a year ago. Revenues increased to $56 million from last year’s $54.9 million.

For the nine months of the current fiscal year, the company had net earnings of $16.8 million, a 21.2% jump over last year.

Commenting on the company’s experience, Denis McGlynn, president and CEO, said, "The conversion of most of our games to ticket-in/ticket-out format, as well as more efficient marketing efforts and the expiration of our management agreement have allowed us to grow our earnings at an accelerated pace."