El­do­rado ac­qui­si­tions pay­ing off

Las Vegas Review-Journal - - BUSINESS - By Todd Prince Las Ve­gas Re­view-jour­nal

El­do­rado Re­sorts de­liv­ered a mes­sage to its in­vestors that few of its larger gam­ing ri­vals can em­u­late right now.

Things are go­ing re­ally well.

The Reno-based gam­ing op­er­a­tor is en­joy­ing the ben­e­fits of a strong U.S. econ­omy while its big­ger peers are get­ting bat­tered by head­winds in Ma­cau and slow growth on the Strip.

“We are just re­ally kick­ing ass this quar­ter,” Chief Fi­nan­cial Of­fi­cer Tom Reeg told in­vestors on a con­fer­ence call Thurs­day about the out­look for the fourth quar­ter. “Our cus­tomer feels strong.”

The com­pany will use some of the money to buy back $150 mil­lion of its shares, or about 5 per­cent.

Reeg’s re­marks and the buy­back helped drive El­do­rado shares in the af­ter hours mar­ket. The stock popped $3.36, or 8.6 per­cent, to $42.25 af­ter the close of trad­ing.

El­do­rado com­pleted the $1.85 bil­lion pur­chase of Trop­i­cana En­ter­tain­ment Oct. 1, widen­ing its foot­print to 28 prop­er­ties in 13 states.

That was its sec­ond large-scale ac­qui­si­tion of a gam­ing com­pany in 17 months fol­low­ing the $1.7 bil­lion pur­chase of Isle of Capri Casi­nos in May 2017.

El­do­rado ini­tially ex­pected cost sav­ings of $40 mil­lion in the first year fol­low­ing the Trop­i­cana deal. Reeg said Thurs­day the com­pany will “dra­mat­i­cally out­per­form” that tar­get.

When asked whether there were any more po­ten­tial ac­qui­si­tions in the pipe­line, Reeg said El­do­rado is “not ac­tively chas­ing” any as­sets.

El­do­rado ex­pects the le­gal­iza­tion of sports bet­ting around the coun­try to drive more vis­i­tors to its prop­er­ties.

Q3 per­for­mance

El­do­rado re­ported net rev­enues of $487 mil­lion in the third quar­ter, up 3 per­cent com­pared with the same pe­riod last year.

The rev­enue growth was com­pletely driven by the ac­qui­si­tion of Grand Vic­to­ria Casino. Ex­clud­ing the pur­chase of the Illi­nois prop­erty, El­do­rado rev­enue would have been down 2 per­cent.

How­ever the com­pany’s ad­justed cash flow surged 16 per­cent to $134 mil­lion, driven by cost sav­ings.

Net in­come rose 27 per­cent to $37.7 mil­lion for the quar­ter, or 48 cents per di­luted share.

Con­tact Todd Prince at 702-3830386 or tprince@re­viewjour­nal.com. Fol­low @tod­dprincetv on Twit­ter.

Kevin Clif­ford

Las Ve­gas Re­view-jour­nal “Our cus­tomer feels strong,” Tom Reeg of El­do­rado Re­sorts says.

Newspapers in English

Newspapers from USA

© PressReader. All rights reserved.