Harrah's reports Q4 loss after takeover

Mar 4, 2008 7:00 AM

Earnings by Ray Poirier | With many gaming executives warning investors to be cautious in their approach to the next few months, it was no wonder that the shares of the industry’s largest participants struggled last week.

And with earnings reports that failed to meet analysts’ expectations, most of the companies’ shares suffered.

For Harrah’s Entertainment, however, it had no immediate effect since the company reported its fourth quarter earnings after it had completed a private-equity buyout, placing cash in the hands of former stockholders.

For the period that ended on Dec. 31, 2007, Harrah’s Entertainment reported a loss of $47.8 million or $0.26 per share. This compared with last year’s profit of $47.6 million or $0.25 per share. The adjusted net income of $80.1 million was down from last year’s $84.9 million.

The quarter results were impacted negatively by a $169.6 million pretax write-off of impairment charges resulting from a required accounting review of two of its operations, the Caesars Indiana riverboat and London Clubs International PLC, a company that was acquired by Harrah’s two years ago.

As for the year’s performance, the company said it earned $619.4 million or $3.26 per share, substantially higher that in 2006 when the earnings were $535.8 million or $2.85 per share.

A company representative said that there were indications of a modest slowdown in some areas where it operates 50 casinos but in the Las Vegas area "the gaming business has held up well."