Churchill dips but beats analysts’ expectations

September 04, 2007 5:38 AM
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Churchill Downs Inc. (CHDN) reported second quarter earnings that were better than what had been forecast by analysts, thus pleasing the investors who have been keeping the share price near the $50 level.

Actually, income from continuing operations declined to $29.5 million or $2.12 per share from last year’s $34.8 million or $2.56 per share.

However, analysts had anticipated a slowing of business and had expected net income to be in the $2.08 range.

Among the significant moves made during the period, the company said, were the installation of a synthetic racing surface at Arlington Park, that helped increase the wagering handle, and the establishment of a new account-wagering platform, expected to be a major financial contributor in the future.

"During the quarter," said Robert Evans, president and CEO, "we did much to move our business forward strategically and financially while continuing to deliver value to our shareholders."

He added that during the second half of the year he anticipated additional benefits from the account-wagering business and to the addition of slot machine gaming at the company’s Fair Grounds racetrack in Louisiana.

Youbet

Being shut out of racetrack content from TrackNetMedia, the newly-formed simulcasting group owned by the partnership of Churchill Downs Inc. and Magna International Corp. (MECA), hurt Youbet.com Inc. (UBET) in its second quarter.

Revenue for the period fell to $37.3 million from last year’s $39.6 million and the company posted a net loss of $357,000 or $0.01 per share compared to a net profit of $2.2 million or $0.06 per share in 2006.

Analysts had expected the company to break even on revenues of $36.6 million.

Not having access to the many racetracks owned by the TrackNetMedia group resulted in UBET losing about 13% of its usual wagers. Being unable to provide wagering on the Kentucky Derby and other major races severely impacted the company’s revenues.

However, the company reiterated its 2007 outlook of earnings of between $0.13 and $0.16 per share.

PokerTek

PokerTek, Inc. (PTEK), a leader in the development of automated poker tables for the casino industry, reported placing more tables in different venues but also continuing to show a net loss for the second quarter.

The company reported that its PokerPro table count had grown to 135 and that it had introduced the Heads-Up Challenge World Series of Poker Edition as its first amusement product.

On the financial side, however, the company said its net loss for the period had increased to approximately $2,811,000 from $2,232,000 in the corresponding period of 2006.

"PokerTek continues to make steady progress in our casino business," explained Lou White, the company’s CEO.

"We have 135 tables installed as of today, up from 14 one year ago. We also are excited about entering the amusement business with the launch of our Heads-Up Challenge product, which we anticipate rolling out to bars and restaurants in the near future," he added.