Penn National reverses second-quarter loss
LAS VEGAS REVIEW-JOURNAL
Regional casino operator Penn National Gaming has five development projects underway in four states and continues to weigh expansion in new markets.
This work continues despite sluggish gaming revenue results from many Southern and Midwestern states in recent months.
The numbers don’t faze Penn National, which owns M Resort in Henderson.
During a Thursday conference call with analysts to discuss Penn’s secondquarter earnings, CEO Tim Wilmott said the casino operator has a “good handle” on business trends where the number of casino visits and spending habits by customers have declined.
Penn National’s answer is to consider expanding and enhancing entertainment and nongaming offerings to entice customers back into its more than two dozen properties. Wilmott and Penn National Chief Operating Officer Jay Snowden believe the company’s customer database could reach 5 million by next year.
During the quarter, which ended June 30, Penn National reversed a second-quarter net loss despite a 14.4 percent decline in net revenue.
Penn said its net income for the quarter was $2.8 million, or 3 cents per share, compared with a loss of $11.3 million, or 14 cents per share, a year earlier.
Revenue fell to $652.1 million from $761.4 million.
Stifel Nicolaus Capital Markets gaming analyst Steven Wieczynski said Penn National’s “better-than-expected results continue to be driven by incremental cost efficiencies.”
Penn National is building a $360 million Indian casino near San Diego that is expected to open in 2016. The company is also building two Ohio racetrack casinos and a hotel at its New Mexico racetrack casino. All three projects are expected to open by September.
Penn National’s racetrack casino in Massachusetts is expected to open in June.
The company recently went into partnership with the Cordish Cos. of Baltimore on a proposed $750 million casino project in Orange County, N.Y., just north of New York City. The state is expected to award four gaming licenses for upstate New York by year’s end.
One jurisdiction Penn does not have interest in is Atlantic City, where elected leaders are hoping to entice casino operators to take over possibly three Boardwalk casinos that could close by September.
Wilmott said it was hard to rationalize buying in Atlantic City because revenue from the market will continue to drop because of more regional competition.
Penn National shares fell 39 cents, or 3.44 percent, Thursday to close at $10.96 on Nasdaq. Contact reporter Howard Stutz at hstutz@reviewjournal.com or 702-477-3871. Follow @howardstutz on Twitter.