Penn National 3Q earnings miss mark

Oct 30, 2007 3:57 AM

Penn National Gaming Inc. (PENN) reported disappointing earnings for the third quarter that ended on Sept. 30 and lowered its revenue outlook for the remainder of the year primarily because of increased competition in the St. Louis, Mo., area.

For the just completed quarter, the company said net revenues were $629.5 million compared to last year’s $640.6 million. Earnings per share amounted to $0.52, down a penny from 2006.

Analysts had anticipated earnings to reach $0.53 per share.

However, analysts noted that last year’s earnings included a $114.7 million gain on the sale of the former Pocono Downs harness track in Pennsylvania to the Mohegan Tribal Gaming Authority. This year’s earnings included the loss of $1.6 million or $0.02 per share due to currency valuations.

Through it all, the company said, it maintains 2007 earnings will reach $163.9 million or $1.86 per share.

In the fourth quarter, the company said it expects earnings from continuing operations to be $35.9 million or $0.41 per share.

In June, Penn National Gaming agreed to be acquired by funds managed by Fortress Investment Group LLC private equity firm Centerbridge Partners LP for $6.1 billion in cash.

There has been no recent announcement as to the progress of the acquisition or when investors can anticipate a closing.

Dover Downs Gaming

The bigger it gets the better it gets say the operators of Dover Downs Gaming & Entertainment Inc. (DDE) which reported record results for the third quarter that ended on Sept. 30.

Net earnings per diluted share for the quarter improved to $7.45 million, a 6.3% jump over the $6.99 reported in the third quarter of 2006.

Per share earnings increased to $0.23 from last year’s $0.21 per share.

For the nine months of fiscal 2007, net earnings per share improved to $63 from $0.58 in the corresponding period of a year ago.

"This was another strong quarter," noted Denis McGlynn, president and CEO. "With additional hotel rooms starting to come online we saw increased revenue from our hotel guests. The continued build-out of our property into a true destination resort should continue to improve revenue from all sources."

The company is expanding its slots casino by 70,000 square feet and increasing the total number of hotel rooms from 232 to 500.