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Dover Downs report a drop in fourth quarter profit

Feb 3, 2009 5:01 PM
by Ray Poirier | Increased taxes and few customers caused Dover Downs Gaming & Entertainment Inc. (DDE) to report a drop of nearly $2 million in fourth quarter profit.

Actually, the company said the reporting period that ended on Dec. 31, 2008, saw revenues decline by 7% to $50.7 million while earnings fell to $3.5 million or $0.11 per share compared to last year’s $5.4 million or $0.17 per share.

Analysts had expected earnings of $0.13 per share.

The company said earnings were impacted by an increase of $700,000 in gaming taxes and slot machine fees as well as lower consumer spending. Hotel occupancy, the company reported, fell to 75% during the quarter.

Following the announcement, Nicholas Danna of Sterne Agee said he believed gaming revenues had stabilized in January although he expected that business would continue to decline further this year.

Danna feels that the biggest long-term risk facing Dover Downs is the development of slots activity in Maryland.