Station Casinos continues
upward trend

Feb 7, 2006 5:31 AM

A solid 19% increase in earnings during the fourth quarter of 2005 and the announcement of an opening date for the much-anticipated Red Rock Resort wasn’t enough for Wall Street traders to boost the share price of Station Casinos Inc. (STN).

In fact, the price of STN shares fell about 5% after the earnings report closing out the week at $65.87.

Reporting on the fourth quarter, the company said diluted earnings per share, adjusted for non-recurring items and development expenses, reached $0.69 compared to the $0.58 per share reported in the corresponding quarter of 2004. The earnings figure exceeded the average estimate of analysts who had focused on earnings of $0.64 per share.

Revenues for the period, including Green Valley Ranch that Station Casinos owns in partnership with the Greenspun Corporation, increased 11%, marking the eight consecutive quarters in which the company reported a double-digit revenue growth over the previous year.

For the full year 2005, the company said revenues jumped 15% to $1.1 billion from the $986 million reported in 2004. Adjusted net earnings came in at $2.74 per diluted share topping last year’s $2.10 per share.

In addressing investors, CFO Glenn Christenson said that the first phase of Red Rock Resort will open on April 18. The new facility in Summerlin will have 400 hotel rooms, 3,000 slot machines and 94,000 square-feet of meeting and convention space. The resort’s initial cost stands at about $760 million.

Also noted was a development partnership between the company and Greenspun Corporation for a casino in the Aliante master-planned community of North Las Vegas. The $450 million project is expected to begin construction in late 2006 or early 2007 and be completed in the middle of 2008.

WMS Industries

Continuing its recent turnaround, WMS Industries reported net income of $8 million or $0.23 per diluted share for the second fiscal quarter that ended on Dec. 31, 2005.

In the same period a year ago, the company reported net income of $3.9 million or $0.12 per diluted share.

The company said revenues during the period rose 21% to a record $113.4 million compared to total revenues in second quarter of 2004 of $94 million.

Credited with the increases was the company’s ability to increase unit sales of its slot machines.

"Our installed base of 6,437 participation units and 823 casino-owned daily fee games puts us well on the way toward achieving our fiscal year-end installed base goal," said Brian Gamache, president and CEO.

"In aggregate, these 78,260 units represent year-over-year installed base growth of more than 44% and growth of more than 71% over the last six quarters," he added

Gamache also commented that "over the past two years we’ve introduced a broad range of innovative, high-earnings products and the strong market reception to these offerings is reflected in our record second quarter results."

However, the company also lowered its expectations for the full year 2006 by projecting that new unit shipments will range from 22,500 units to 24,000. Earlier estimates had placed the projections at between 23,500 to 25,000 units.