Revenue records fell during the first quarter of the current fiscal year, according to reports made by Harrah’s Entertainment Inc. (HET) and MGM MIRAGE Inc. (MGM), the country’s two largest gaming companies, and Boyd Gaming Corporation (BYD), one of the two largest so-called "locals" gaming companies.
Harrah’s, crediting its merger with the Caesars’ gaming properties, reported record revenues of $2.4 billion, a 93.3% increase over the 2005 first quarter. Adjusted earnings per share from continuing operations rose to a record $1.02, a 22.9% increase from last year’s $0.83 per share.
First quarter income from operations almost doubled to a record $453.1 million while net income jumped 75% to a record $182.4 million.
Harrah’s said the gains were driven by contributions from Caesars Entertainment Inc. properties that were acquired in June 2005 and increased visitation and spending by members of the company’s customer-loyalty program, Total Rewards.
"The 2006 first quarter produced the best operating results in Harrah’s history due to continued successful execution of an organic growth strategy that has enabled us to record same-store sales growth in all but one of the past 34 quarters," remarked Gary Loveman, company chairman and CEO.
"In addition," he said, "we achieved our projected $80 million first-year synergy target for the Caesars properties by the end of the first quarter — three months ahead of schedule — and expect the first full year number to exceed $110 million. We project our second year of Caesars ownership will yield $180 million of synergies."
The company expects to have expansion programs underway in Atlantic City, N.J., and in Hammond, Ind., as well as racing at Harrah’s Chester racetrack near Philadelphia, Pa., and a racino at that location, subject to receiving a slots license, by early 2007.
On the international front, the company has new ventures planned for Spain, Slovenia and the Bahamas.
MGM MIRAGE Inc. (MGM) began its quarterly report by announcing that it had adopted the Statement of Financial Accounting Standards (SFAS) and would from this report onward use the generally accepted accounting principles (GAAP) method of reporting its financial results.
Under the new system, the company said diluted earnings per share amounted to $0.49, an increase of 29% over the $0.38 per share reported in the first quarter of 2005.
Revenues jumped to $1.9 billion, easily topping last year’s $1.2 billion while net income reached $144 million against last year’s $111 million.
"The first quarter was another strong operating quarter for MGM MIRAGE," said Terry Lanni, company chairman and CEO.
"We continued to build on our foundation of world-class resorts, and we also made significant progress on meaningful development projects which we believe will leverage our strengths — management, brands, financial discipline — and lead to sustained growth for many years to come."
The company noted that same store hotel revenues were up 7% as the company had 60,000 more available rooms and realized a 3% increase in same store revenue per available room.
Boyd Gaming Corporation (BYD) reported record adjusted earnings of $0.78 per diluted share for the first quarter of the 2006 fiscal year. This included a charge of $0.04 per share for stock options, an accounting rule that was adopted by the company beginning on Jan. 1.
Adjusted per share earnings of $0.78 were 22% higher that the $0.64 reported in the first quarter of 2005.
Revenues for the period were $646 million or 14% higher than a year ago when revenues reached $567 million. Net income was $63.2 million, a 58% jump over the $40.1 million reported in the comparable quarter of a year ago.
Bill Boyd, company chairman and CEO, said, "Our results were impressive in so many areas throughout, especially Borgata having its second highest quarterly EBITDA (earnings before interest, taxes, depreciation and amortization) ever, achieving it in the dead of winter, and Blue Chip (riverboat casino) opening its new facility so successfully. Not only are our operations doing very well, but our growth pipeline is also impressive."
Proving once again that its suitors are more interested in real estate than in current operating facilities, Aztar Corp. (AZR) reported a drop of 68% in earnings for the first quarter of the current fiscal year.
While attempting to determine whether to entertain the offers of Columbia Sussex LLC, Ameristar Casinos Inc. (ASCA) or Pinnacle Entertainment Inc. (PNK), the company reported that quarterly revenue edged up 2% during the March 31 quarter but development write-offs caused the company to report earnings of $3.2 million or $0.08 per share.
In the comparable quarter, the company reported earnings of $9.9 million or $0.27 per share.
A consensus of analysts had forecast earnings of $0.38 a share.
The company said the Tropicana in Las Vegas had suffered a sales dip of 4.3% because it was hampered by a variety of operating issues, including customer concern and reaction to the potential closing of the property in anticipation of a sale.
However, CEO Robert Haddock said that the development of the property has been deferred and "(we) will be able to resume its normal operating pattern."