Gaming Partners surprises with big Q2 earnings

Aug 19, 2008 7:00 PM

Earnings by Ray Poirier | Selling more casinos chips and benefiting from a favorable tax ruling in France helped Gaming Partners International Corporation (GPIC) show a dramatic improvement in its second quarter income.

For the period that ended on June 30, the company reported net income of $1.8 million or $0.23 per share compared to last year’s $400,000 or $0.05 per share.

Revenues increased to $18.9 million, a 28% jump over last year’s $14.8 million.

"Several things went well for us in the quarter," explained Gerard Charlier, president and CEO, "but our success was largely driven by higher sales of casino chips. We were also every pleased that the French Tax Administration reversed its position on a tax matter, which not only relieved us of a potential liability of approximately $800,000, but also allowed us to reverse an accrual, which reduced our tax expense this quarter by $208,000."

For the six months of the current fiscal year, the company had revenues of $31 million compared to $23.7 million in 2007. Net income moved up to $1.4 million or $0.18 per share compared to a net loss of $1 million or $0.13 a share in the six months that ended on June 30, 2007.

Investors were quick to react to GPIC’s improved performance on Friday. At the end of the trading day, after 210,843 shares had changed hands, the company’s share price had moved up $1.96 to $5.40.

Melco Crown Entertainment

Although Melco Crown Entertainment Limited (MPEL) reported a large increase in revenue, the company still remained in the red with a second quarter loss of $5.7 million or $0.01 per share compared to a net loss of $69.2 million or $0.17 per share in 2007.

Net revenue jumped to $384.6 million, almost all from the company’s Crown Macau resort. Last year, when the Macau facility was only open part of the time, revenue was $45.1 million.

In addition to its original Macau casino, and another under construction on the Cotai Strip, Melco Crown operates slots facilities.

Lawrence Ho, son of the fabled Stanley Ho and co-chairman with James Packer, cited increased competition for the Macau high-roller as the principal problem facing the company.

He said competing junket operators had significantly expanded their operations. Despite this, he said, "we remain firm in our view that Macau’s future as the gaming capital of Asia is assured. The market is still in its infancy stage of development and one of the characteristics of the market is rapid-fire change."

Other reports

Lakes Entertainment experienced a loss of $5.2 million or $0.21 per share in the second quarter. The company explained that the loss was "due in large part" to higher administrative expenses. A year earlier, the company that is majority owner of World Poker Tour showed a loss of $6.6 million or $0.25 per share.

Churchill Downs Inc. (CHDN) reported flat second quarter earnings despite experiencing a 5.5% increase in revenue. The racetrack company said revenue increased to $179.3 million but that net income was only $29.4 million or $2.11 per share compared to the previous year’s $29.3 million or $2.11 per share.

WMS Industries (WMS) said earnings rose 29% to $21.6 million or $0.36 per share compared to $16.7 million or $0.29 per share in the fiscal fourth-quarter of 2007. Also, revenues rose 17% to $185.6 million from $158 million.

Morgans Hotel Group Co. (MHGC) had a loss of $730,000 or $0.02 per share compared with earnings of $841,000 or $0.03 per share in the comparable quarter of the previous year.

Trump Entertainment Resorts Inc. (TRMP) saw its net loss widened to $29.8 million or $0.94 per share compared to last year’s $13.5 million or $0.43 per share. Revenues during the second quarter fell to $177.8 million from $186.8 million.