Business prospects good at Penn National Gaming

Apr 27, 2009 5:04 PM
Earnings by Ray Poirier | Not only is Penn National Gaming Inc. (PENN) sitting on a vault full of cash but business prospects are so good that the company has boosted its profit outlook for the year.

Reporting on the first quarter of the fiscal year, the company said it earned $40.7 million, almost identical to a year earlier, and that per share earnings were $0.38 each as opposed to last year’s $0.46 when there were fewer company shares outstanding.

Diverse gaming operations in a number of different markets helped the company avoid the economic downturn that has affected so many gaming companies.

Penn National Gaming operates horse tracks, casinos and racinos in Florida, Indiana, Louisiana, New Mexico, Ohio and West Virginia.

Last year, the company successfully negotiated the end of a buyout proposal that enhanced the company’s coffers by nearly $1.5 billion. With so many gaming giants facing bankruptcy and unable to borrow additional cash, analysts have been looking to Penn National Gaming to acquire a major property.

That could happen, said Peter Carlino, chairman and CEO, but only when he is satisfied that the price is right.

Joe Greff, chief gaming analyst with JP Morgan, said he was pleased with the report.