EARNINGS PREVIEW: Improved Results Seen At Large US Casinos
29 Abril 2010 - 2:54PM
Dow Jones News
TAKING THE PULSE: Some casino companies are expecting improved
first-quarter results compared with a year earlier, when most
posted losses during the depths of the recession, which sharply
reduced tourism and consumer spending. With recent openings of two
big resorts in Macau and Singapore by Wynn Resorts Ltd. (WYNN) and
Las Vegas Sands Corp. (LVS), respectively, both companies now rely
on Asia for most of their revenue.
Las Vegas remains weak though convention bookings have picked
up, but prospects are bright in Macau, China's gambling enclave and
the world's largest casino market by revenue. Meanwhile, five
casinos are for sale in Atlantic City, N.J., which has been hurt by
the recession and competition from gambling in nearby
Pennsylvania.
Penn National Gaming Inc. (PENN) last week reported an 11%
decline in first-quarter profit as revenue slid 3.3% on the
continuing downturn in U.S. gambling. The company, which operates
19 casino and horse-racing facilities in 14 states and Ontario but
not in Las Vegas, also said bad weather hurt results at some
locations.
COMPANIES TO WATCH:
Wynn Resorts Ltd. (WYNN) - reports Thursday
Wall Street Expectations: Analysts anticipate earnings of 14
cents a share on revenue of $850 million, according to analysts
polled by Thomson Reuters. A year earlier, Wynn had a loss of 30
cents on $740 million in revenue.
Key Issues: Wynn, which has a stronger balance sheet than most
of its rivals, is opening its new hotel and casino, Encore at Wynn
Macau, and plans to start construction of a major new casino in
Macau's Cotai area next year. Asia has become so core to the
company's operations that Steve Wynn said he will consider moving
the firm's headquarters to Macau from Las Vegas.
Boyd Gaming Corp. (BYD) - reports May 4
Wall Street Expectations: Analysts anticipate earnings of 7
cents on revenue of $410 million, compared with a prior-year loss
of 16 cents on revenue of $435 million.
Key Issues: One of the oldest Las Vegas gambling companies, Boyd
attracts many locals, who are struggling with declining home values
and job losses. The company has been trying to buy rival bankrupt
Station Casinos Inc., but a series of insider deals that Station
recently struck with lenders and members of its founding family
make it unlikely that Boyd will win its bid.
MGM Mirage (MGM) - reports May 6
Wall Street Expectations: Analysts predict a loss of 27 cents on
revenue of $1.41 billion. A year earlier, the casino giant reported
earnings of 38 cents, including a 44-cent gain from selling Las
Vegas' Treasure Island, on revenue of $1.66 billion.
Key Issues: MGM Mirage this month warned that its loss would be
larger than Wall Street expected and would include a $255 million
operating loss for its $8.5 billion CityCenter, which opened in Las
Vegas in December. The debt-laden company last month said it would
leave Atlantic City, where it co-owns the Borgata with Boyd Gaming,
in response to regulatory concerns.
Las Vegas Sands Corp. (LVS) - no reporting date set
Wall Street Expectations: The largest publicly traded U.S.
casino company by market capitalization, is seen posting a 2-cent
profit on revenue of $1.3 billion. A year earlier, its loss was 14
cents on revenue of $1.08 billion.
Key Issues: The casino giant, best known for the Venetian
resorts in Las Vegas and Macau, just opened the world's most
expensive casino, the $5.5 billion Marina Bay Sands, on Singapore's
main waterfront. When the new resort is fully operational in June,
the company will get as much as 85% of its earnings from Asia.
(The Thomson Reuters estimate and year-ago figures may not be
comparable due to one-time items and other adjustments.)
-By Kathy Shwiff, Dow Jones Newswires; 212-416-2357;
Kathy.Shwiff@dowjones.com
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