A significant earnings increase at Treasure Chest Casino in Kenner, La., helped Boyd Gaming Corp. (BYD) achieve a record in earnings both for the quarter and the full year 2005, according to the company’s announcement last week.
Adjusted earnings for the quarter amounted to $0.76 per share compared to the previous year’s $0.51 per share. Revenues for the quarter were $565 million, an increase of 4.8% over 2004.
Adjustments applied against fourth quarter earnings included $56 million pre-tax impairment charge at the Stardust that was related to the company’s decision to cease operations around the end of the current year to pave the way for the construction of the $4 billion Echelon Place.
Also included in the adjustment was $11 million that related to the pre-opening expenses for the South Coast. Another $1.5 million was related to wage continuation payments to workers displaced by the Gulf Coast hurricanes.
For the full year of 2005, revenues were $2.22 billion, an increase of 28% over the $1.73 billion reported in 2004. The increase was primarily attributable to the addition of Coast Casinos, acquired in July 2004, and Sam’s Town Schreveport, La., which was purchased in May of 2004.
The Treasure Chest Casino, closed for part of the fourth quarter because of Hurricane Katrina, was reopened in time to operate for 83 days during the reporting period while the racino at Delta Downs operated for only 59 days after being closed by Hurricane Rita.
Of particular note, said Bill Boyd, company chairman and CEO, was the strong performance of the properties in downtown Las Vegas. "Our downtown Las Vegas unit set a new EBITDA (earnings before interest, taxes, depreciation and amortization ) record by a wide margin.
"With strong, diverse operations and an excellent growth pipeline highlighted by our recently announced development of Echelon Place on the Las Vegas Strip, I remain optimistic about our future," he concluded.
Investors reacted favorably immediately after the earnings announcement but by the end of the trading week shares of Boyd Gaming had fallen to $44.70 per share.
Fewer sales of its mostly Class II slot machines caused Multimedia Games Inc. (MGAM) to report a substantial drop in earnings for the first fiscal quarter of 2006 that ended on Dec. 31, 2005.
With revenue falling to $34 million from last year’s $39.2 million, diluted earnings per share dropped to $0.05 from the comparable period’s $0.17 per share. Analysts had expected $0.08 earnings per share.
Average installed player terminals fell to 13,396 units from last year’s 15,091 units.
Guidance for the second quarter also failed to encourage investors. The company said it expected second quarter earnings to be in the range of $0.06 to $0.07 per share, a figure that includes a charge of $0.02 per share as an expense for stock options. Analysts had expected earnings to be about $0.12 per share.