Street rewards Boyd’s quarter

Feb 27, 2007 5:16 AM

The share price for Boyd Gaming Corp. (BYD) shot up nearly three dollars last week when the company reported that its fourth-quarter profit more than doubled on lower expenses and a hurricane-related insurance claim settlement.

Prior to the quarterly announcement, shares were trading at just below $46 each but soon moved up to $48 and change.

Net income grew to $56.3 million or $0.64 per share from last year’s $22.9 million or $0.25 per share. Yet revenue fell some 4% to $520.8 million.

Boosting the company’s profit for the period was the $36.1 million it received for hurricane damages at Delta Downs in Vinton, La. Among the charges were $3.6 million or $0.03 per share for a stock-based compensation expense; a $3.6 million related to the sale of the South Coast casino to Michael Gaughan; a $6.5 million charge for the Stardust closing; a $1.6 million charge for accelerated depreciation at the Stardust, and a $4.8 million related to other pre-opening costs.

Breaking down the quarterly performance by regions, the company said the Las Vegas locals segments (its Las Vegas Strip property, the Stardust, was closed for demolition) showed significant improvement with three of its four major properties nearly matching fourth quarter 2005 net revenues and adjusted levels.

In the central region, the Blue Chip riverboat that benefits from its proximity to Chicago, Ill., was up 20%.

As for downtown Las Vegas, the company said its properties "matched" previous year’s record performances.

Taking a hit during the period was the Borgata in Atlantic City. Despite continuing to lead the market during the period, it showed gaming revenue had fallen by 1.5%. Net income at the Borgata was down 28.6% primarily due to lower table game hold percentages and fixed costs related to its public space expansion.

Bill Boyd, chairman and CEO, said that the company plans to begin construction of its Echelon Place development on the site of the former Stardust Hotel/Casino in the second quarter of 2007.