While most gaming companies saw their earnings negatively affected by the Gulf Coast hurricanes, Pinnacle Entertainment Inc. (PNK) was not among them. In fact the company’s properties benefited from the lack of competition last year, helping the company report record earnings.
This year, however, the first quarter’s results suffered in comparison since the competition in the area has returned.
So, the first quarter’s net income of $0.05 per share from $2.9 million did not surprise analysts. Still the company’s $232.8 million in revenue, although less than last year’s $234.1 million, surpassed the consensus figure of $222.7 million.
The company said results were helped by the acquisition of President Riverboat Casino in Missouri but also reflected pre-opening costs, a stock option expense and loss from discontinued operations.
"Our properties are continuing to perform well and posted solid overall results in the quarter," said Dan Lee, Pinnacle’s chairman and CEO.
"Just as important, we’ve made significant progress on our development pipeline. Both Lumiere Place and our hotel expansion at L’Auberge du Lac will be topping off this month. We continue to work on the design of our Atlantic City project while preparing the project site. In Baton Rouge, we put more than 500 acres of land under contract and have announced plans for a creative mixed-use development anchored by a luxurious casino and championship golf course, he added.
Also, the company said it planned to "redeploy" the $45 million it had budgeted for an expansion project at the Belterra riverboat in Indiana. State lawmakers have approved the installation of 2,000 at each of the state’s two horse tracks, a move that Pinnacle Entertainment sees as negatively affecting its business.
Lacking revenues from a completed installation that will be recorded in the next quarter, Progressive Gaming International Corporation (PGIC) reported revenues and a net loss that were comparable to last year’s first quarter.
Revenues were $16.9 million with a net loss of $8.7 million or $0.25 per share compared to revenues of $16.9 million and a net loss of $8.8 million or $0.26 per share in 2006.
Not included in this year’s revenue was $3.8 million representing $0.11 per share that was due from the installation of several large systems. Pursuant to generally accepted accounting principles the revenues will be recorded in the second quarter, the company said.
The systems installed base grew 18% year-over-year and 6% on a quarterly sequential basis while the CasinoLink Jackpot Systems installations rose to 5,558 or 46%, the company said.
One of the benefits accruing to the management of Harrah’s Entertainment Inc. (HET), now that it is in the process of a buyout by two private equity groups, is that they don’t have to face a barrage of questions from analysts after announcing their quarterly financial experience.
So, Harrah’s released its report for the first quarter without public comment. It said net income for the period rose to $185.3 million or $0.98 a share from last year’s $182.4 million or $0.98 per share.
However, excluding one-time items, the company posted profit from continuing operations of $0.88 per share, or about 14% lower from the $1.02 per share recorded in 2006.
The income fell short of analysts’ estimates with the average looking for $0.99 a share on revenue of $2.51 billion. Actually, revenues moved upward by 13% to $2.66 billion with a positive move in Las Vegas, where the properties climbed 9% while the Atlantic City area rose 11%, primarily because it included in the report the revenues from the new racino at Harrah’s Chester in the Philadelphia suburb of Chester.
There was little change in the price of a share on the New York Stock Exchange. The price has been in the $85 range for several weeks with the buyout price being $90 per share.
Another company that reported its quarterly results without the addition of a conference call was Station Casinos Inc. (STN), which is being taken private by some members of the Fertitta family and Colony Capital LLC.
Earnings for the first quarter that ended on March 31 fell to $23.1 million or $0.41 per share compared with the $41.1 million or $0.62 per share the company reported a year ago.
Adjusted earnings for the period were $28.7 million or $0.51 per share versus $51.5 million or $0.78 per share, substantially below the consensus figure of $0.58 per share expected by gaming analysts.
Affecting the earnings, the company said, was a major increase in interest expense which more than doubled to $56.5 million compared to last year’s $23.8 million.
The company said its revenue from the Las Vegas operations rose to $335 million from last year’s $254.7 million while revenue at Green Valley Ranch Stations, which the company owns with the Greenspun family, rose to $69.4 million from the $67.1 million reported in 2006.
The buyout of the company will be for $5.4 billion or $90 per share.