EARNINGS PREVIEW: Large US Casinos Look For Demand, Macau Strength
April 14 2011 - 3:29PM
Dow Jones News
TAKING THE PULSE: For big U.S.-based casino operators, the name
of the game still remains Las Vegas and convincing consumers who go
there to crack open their wallets amid high unemployment. But
expansion and Asia are becoming a bigger piece of the picture and a
significant driver of top and bottom lines. Many of the biggest
casino operators posted better results in the fourth quarter,
helped by casino openings and strong revenue in the Chinese
gambling enclave of Macau. Analysts expect more of the same in the
first quarter.
COMPANIES TO WATCH:
Penn National Gaming Inc. (PENN) - reports April 21
Wall Street's Expectations: Analysts polled by Thomson Reuters
most recently forecast earnings of 40 cents a share on $663 million
in revenue. A year earlier, the company earned 34 cents and posted
revenue of $592.3 million.
Key Issues: Penn, which operates U.S. horse-racing facilities
and casinos mostly in the Midwest, South and on the East Coast, has
posted better revenue of late, with 10 of its 15 gaming properties
seeing an improved top line during the fourth quarter. Company
executives, though, said in February that their outlook calls for a
continuation of 2010 trends until they see a more meaningful
recovery.
MGM Resorts International (MGM) - reporting date TBD
Wall Street's Expectations: Analysts forecast a loss of 19 cents
a share and revenue of $1.51 billion. A year ago, MGM had a 22-cent
loss, including a net 9-cent gain--and $1.46 billion in
revenue.
Key Issues: MGM has posted continued losses in recent quarters
as it has booked charges and revenue has fallen at most of its
casinos amid persistently high unemployment. Though casino revenue
declined in the fourth quarter, executives said they were
encouraged by the level of business activity they had been seeing
in early 2011. MGM earlier this week said it had reached an
agreement with Macau mogul Pansy Ho to give it a majority stake in
its Chinese joint venture after the venture's initial public
offering.
Las Vegas Sands Corp. (LVS) - reporting date TBD
Wall Street's Expectations: Analysts see the company earning 44
cents a share on $2.14 billion in revenue. A year ago, Las Vegas
Sands lost 4 cents a share after paying preferred dividends--but
posted a 7-cent profit excluding items such as pre-opening
costs--on $1.33 billion in revenue.
Key Issues: Las Vegas Sands, which gets most of its revenue from
Asia, has swung itself to the black in recent quarters, and results
recently have been boosted by its Marina Bay Sands resort in
Singapore that opened in August. The company also has seen strong
revenue growth and better margins in Macau. Moody's in February
lifted its rating on the company for the third time since August,
saying Las Vegas Sands has the ability and willingness to cut its
debt this fiscal year.
Wynn Resorts Ltd. (WYNN) - reports in April
Wall Street's Expectations: Wall Street sees Wynn earning 72
cents a share on $1.14 billion in revenue. The company a year ago
posted a 22-cent profit, including 4 cents of charges, while
revenue was $908.9 million.
Key Issues: Wynn's recent results have been strong, helped by
more growth in Macau and stronger gaming revenue in Las Vegas. J.P.
Morgan analysts earlier this month increased their earnings and
price targets on Wynn as well as Las Vegas Sands "on recent
market-wide Macau Data" as well as a recent trip to Macau and
Singapore.
Boyd Gaming Corp. (BYD) - reports May 3
Wall Street's Expectations: Analysts project a 1-cent profit on
$569 million in revenue. A year earlier, Boyd posted a 10-cent
profit and $398.4 million in revenue.
Key Issues: Geographically diverse Boyd, which is one of Las
Vegas's oldest gambling companies, has seen results pressured of
late as charges weighed on its bottom line, though the company's
revenue has surged--helped by its half stake in the Borgata resort.
As that Atlantic City mainstay goes, Boyd's top line is likely to
go, too--the company's fourth-quarter revenue jumped 43%, but
without Borgata, it would have declined 0.5%.
(The Thomson Reuters estimates and year-earlier results may not
be comparable due to one-time items and other adjustments.)
-By Nathan Becker, Dow Jones Newswires; 212-416-2855;
nathan.becker@dowjones.com;
PENN Entertainment (NASDAQ:PENN)
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