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Penn links weak earnings to bad weather, less interest in gambling
LAS VEGAS REVIEW-JOURNAL FILE PHOTO
Regional casino giant Penn National Gaming said Tuesday bad weather in several markets and a reduced interest in gambling by customers led to poor second quarter results.
The company, which operates M Resort in Henderson said it lost $12.2 million or 16 cents a share in the quarter that ended June 30. A year ago, Penn National recorded a net profit of $66.7 million or earnings of 63 cents per share.
Analysts polled by FactSet Research expected earnings of 61 cents per share.
The results disappointed Wall Street, sending shares of Penn National down almost 7 percent this morning.
“Second quarter operating results fell short of our guidance due to several factors,” Penn National Chairman Peter Carlino said in a statement.
The company said bad weather in Midwest, including tornados and flooding, caused several casino closures. Penn National also experienced $76 million in charges related to an Iowa casino that state gaming regulators are transferring to another operator.
Total revenues for Penn National grew 6.9 percent to $761.4 million in the quarter.
The east-west region, which includes M Resort, had the largest decline of any of the company’s reporting divisions with revenues down 9.1 percent to $317.1 million. Cash flow at the division’s properties fell 3.3 percent to $95.1 million.
The company does not break out results for M Resort separately.
Penn National executives did not discuss M Resort or Las Vegas on a call with analysts Tuesday.
Company executives also reduced revenue and earnings projections by roughly 5 percent for the rest of 2013, placing the blame on “general” consumer softness in many of the company’s regional markets.
“While investors expected a soft quarter and outlook, the new guidance was below reduced expectations, in our view,” JP Morgan gaming analyst Joe Greff told investors.
The poor quarter was not a shock to some on Wall Street.
“At the very least, we are surprised that Penn believes trends have worsened that much since their April conference call,” said Brean Capital gaming analyst Justin Sebastiano.
http://www.reviewjournal.com/business/casinos-gaming/penn-links-weak-earnings-bad-weather-less-interest-gambling
The company, which operates M Resort in Henderson said it lost $12.2 million or 16 cents a share in the quarter that ended June 30. A year ago, Penn National recorded a net profit of $66.7 million or earnings of 63 cents per share.
Analysts polled by FactSet Research expected earnings of 61 cents per share.
The results disappointed Wall Street, sending shares of Penn National down almost 7 percent this morning.
“Second quarter operating results fell short of our guidance due to several factors,” Penn National Chairman Peter Carlino said in a statement.
The company said bad weather in Midwest, including tornados and flooding, caused several casino closures. Penn National also experienced $76 million in charges related to an Iowa casino that state gaming regulators are transferring to another operator.
Total revenues for Penn National grew 6.9 percent to $761.4 million in the quarter.
The east-west region, which includes M Resort, had the largest decline of any of the company’s reporting divisions with revenues down 9.1 percent to $317.1 million. Cash flow at the division’s properties fell 3.3 percent to $95.1 million.
The company does not break out results for M Resort separately.
Penn National executives did not discuss M Resort or Las Vegas on a call with analysts Tuesday.
Company executives also reduced revenue and earnings projections by roughly 5 percent for the rest of 2013, placing the blame on “general” consumer softness in many of the company’s regional markets.
“While investors expected a soft quarter and outlook, the new guidance was below reduced expectations, in our view,” JP Morgan gaming analyst Joe Greff told investors.
The poor quarter was not a shock to some on Wall Street.
“At the very least, we are surprised that Penn believes trends have worsened that much since their April conference call,” said Brean Capital gaming analyst Justin Sebastiano.
http://www.reviewjournal.com/business/casinos-gaming/penn-links-weak-earnings-bad-weather-less-interest-gambling
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