Penn National Gaming quarterly earnings down

Feb 10, 2009 5:05 PM
by Ray Poirier | A goodwill write-down of $481.3 million had a severe impact on the quarterly earnings reported by Penn National Gaming Inc. (PENN).

The write-down resulted in the company reporting a loss of $4.77 per share on revenues of $571.1 million. Last year, the company had earnings of $29.9 million or $0.28 per share on sales of $570.4 million.

In addition to the goodwill adjustment, the company included a hefty lobby charge in its write-down to reflect the monies spent to kill a casino proposal in Ohio that would have permitted Lakes Entertainment Inc. (LACO) to build that state’s only casino.

For the year, the company said it expects a profit of $143 million or $1.29 per share.

Although the company’s quarter reflected a substantial loss, the results were heralded by prominent gaming analyst Steve Kent of Goldman Sachs who wrote, "Penn missed the quarter, but we think that expectations for 2009 have come down and that guidance could be a relief."