Penn National profits plummet in third quarter

Oct 21, 2009 7:29 PM
Staff & Wire Reports |

Penn National Gaming today reported third quarter gambling revenue of $620.4 million, slightly ahead of last year’s results of $617.9 million, although net income plummeted to $21.4 million, an 85 percent drop-off.

Gaming revenue increased to $565.5 million in the third quarter of 2009 from $558.4 million in the same period of 2008.

"The challenging economic environment, which has resulted in lower consumer spending at gaming facilities, continued to impact operating results for both the overall industry and Penn National in the third quarter, particularly during the month of August," Peter Carlino, chairman and chief executive officer of Penn National, said in a prepared statement.

Other Articles:
Penn National seeks gambling bargains
La. casino revenue down 1.3 percent over past year
Economy central to Ohio casino fight
Also Check out our Slots & Casino

In a conference call, Carlino noted that Penn National still has an interest in purchasing the bankrupt, unfinished Fontainebleau Las Vegas. He said the company is in talks with a partner "who could bring something besides money to the table."

Carlino also noted that the company has reacted to the economic downturn, in order to preserve capital and cut operating expenses.

"On a property-by-property basis, Penn National has taken further steps to maintain operating margins through cost and staff reductions and other initiatives and, as a result, Penn National’s third quarter EBITDA margin only declined by approximately 100 basis points when compared to last year," Carlino said. "With our focus on managing to current gaming spend trends, nine of Penn National’s sixteen owned or operated facilities that offer gaming recorded year-over-year EBITDA gains.

"In addition, newer properties and those where we have recently completed facility expansions and enhancements such as Hollywood Casino Lawrenceburg, Hollywood Casino at Penn National Race Course, Empress Casino Hotel and Hollywood Slots Hotel and Raceway all recorded year-over-year increases in third quarter EBITDA, though these gains were likely muted by current macro-economic conditions. While several properties under-performed during the quarter, we are generally pleased with the performance of our other properties, given current national and regional economic conditions."

Question? Comment? E-mail the staff at: Staff of GamingToday