Penn beats Q2 revenue expectations

CEO Wilmott to leave company at year’s end

Regional gaming giant Penn National Gaming Inc. battled hurricanes and floods in several markets but surprised analysts with a 60 percent jump in revenue, the company reported Thursday.

The Wyomissing, Pennsylvania-based operator of the Tropicana and M Resort in Las Vegas also announced that its chief executive officer, Tim Wilmott, will retire at the end of the year. Jay Snowden, Penn National’s president and chief operating officer, will succeed Wilmott on Jan. 1.

Wednesday evening, the company also announced that it had entered multiyear agreements with sports betting operators Draftkings, Pointsbet, thescore and The Stars Group for online sports betting and igaming market access across the company’s portfolio.

In Thursday’s conference call with investors, the company indicated it probably wouldn’t be a buyer of Strip assets should they be divested because of Eldorado Resorts Inc.’s planned acquisition of Caesars Entertainment Corp.

“I think in the short term, we want to de-risk our balance sheet and see bigger free cash flow and get our leverage levels down,” Wilmott said. “Two years from now, that story and our perspective may be different, and there may be opportunities out there for Jay to consider with the management team here. But in the short term, I don’t see any need to look differently on capital allocation on the Strip in Las Vegas.”

Snowden added that under his watch, the focus would remain on deleveraging the balance sheet.

“It’s not imperative that we have a Las Vegas Strip asset or two Strip assets,” he said. “We’re going to drive success with this company through a variety of strategies … and we do believe that interactive will be a big part of our future. Would it be nice to have a center Strip asset? Sure. Are we going to overpay for one? Absolutely not. Not today, not ever. If the price is right, we’d consider it down the road.”

Penn reported a 4.8 percent drop in net income to $51.4 million, or 44 cents a share, on revenue of $1.323 billion for the quarter that ended June 30. A year earlier, the company produced net income of Net income Earnings per share $54 million, or 57 cents a share, on revenue of $826.9 million.

This year’s results included revenue for a part of the quarter from the Greektown hotel-casino in Detroit. Penn National bought the Greektown in May for $300 million.

Shares of Penn National Gaming closed down 2.15 percent Thursday to $19.10.

Contact Richard N. Velotta at rvelotta@reviewjournal.com or 702477-3893. Follow @Rickvelotta on Twitter.