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Penn National earnings dip

Apr 29, 2008 7:00 PM

Earnings by Ray Poirier | While Chairman and CEO Peter Carlino spoke promisingly about racino developments in Pennsylvania and Maine, Penn National Gaming Inc. (PENN) investors debated whether the proposed acquisition of the company will take place as planned on June 15.

There has been no discouraging words from the buyers, Fortress Investment Group LLC (FIG) and Centerbridge Partners, L.P. who proposed buying the company for $67 per share, but because of the current credit squeeze many doubt that the acquisition will be consummated.

That hasn’t stopped Carlino and his associates from seeking approvasl for the buyout from the many jurisdictions in which the company has gambling establishments.

While reporting the company’s first fiscal quarter experience, Carlino called the period "challenging" because of the economic conditions as well as problems caused by smoking bans in Colorado and Illinois.

Yet, the company reported increased revenues of $613.5 million compared to $596.3 million and net income of $40.7 million, down from $42.9 million. Diluted per share earnings were $0.46 compared to last year’s $0.49 per share.

Contributing to the per share loss, Carlino said, was about $0.04 per share that resulted in pre-opening expenses incurred at Hollywood Casino at Penn National Race Course in Pennsylvania, and Hollywood Slots Hotel and Raceway in Bangor, Maine.

Boosting the results, he noted, was the operation of the Black Gold Casino at Zia Park, New Mexico, which was acquired in April, 2007.

The Pennsylvania racino, he said, operates 2,020 slot machines while the Maine property, a permanent facility that will open in July, will have 1,000 slots.

"During the first quarter," Carlino told investors, "we advanced three near-term development opportunities – all of which remain on schedule – that will establish a new gaming facility as well as enhance our existing asset base." He also mentioned the ongoing expansion project at Lawrenceburg, Indiana, where the riverboat will operate 1,600 gaming positions, and efforts being made to acquire casino licenses in Kansas and Atlantic City.

More earnings

As the earnings season continues, several gaming companies have announced the dates for their reports. They include:

Wynn Resorts Ltd. (WYNN) to report on Thursday, May 1, at l:30 p.m. PDT.

Multimedia Games Inc. (MGAM) on Wednesday, May 7, at 7 a.m. PDT.

WMS Industries Inc. (WMS) on Wednesday, May 7 at 5:45 a.m. PDT.

Churchill Downs Inc. (CHDN) Wednesday, May 7 at 6 a.m. PDT.

Trump Entertainment Resorts Inc. (TRMP) on Thursday, May 8 at 8 a.m. PDT.

Riviera Holdings Corporation (RIV) on Thursday, May 8 at 11 a.m. PDT.

Scientific Games Corp. (SGMS) on Friday, May 9 at 5:30 a.m. PDT.