Penn National has strong start to 2021
During the coronavirus pandemic, as casinos were shut down as part of mitigation efforts, Penn National Gaming Inc. was able to blunt the effects of the economic downturn with its internet gaming offerings.
For the first quarter, the Wyomissing-based company said Thursday it had net income of $90.9 million, or 55 cents per diluted share, for the period that ended March 31. That compares to a loss of $608.8 million, or negative $5.26 per share, for the same quarter of 2020 as the pandemic hit.
The results were better than what Wall Street analysts had predicted. Eight analysts surveyed by Zacks Investment Research for The Associated Press predicted 30 cents per share.
Revenue was $1.27 billion and earnings before interest, taxes, depreciation, amortization and restructuring or rent costs was $447 million.
President and CEO Jay Snowden says those results give Penn National a running start as the country reopens.
The partnership with Barstool Sports expanded during the quarter with the openings of digital sports books in Michigan and Illinois along with a full integration of the company’s mychoice loyalty program across its footprint. Since launching the digital sports book just over seven months ago, Penn National said it has registered more than 400,000 customers and generated more than $660 million and $61 million in handle and gaming revenue, respectively. The plan is for Barstool Sportsbook to be live in eight states by football season and in at least 10 states before the end of the year.
Another highlight, Snowden said, was Penn National’s inclusion in the S&P 500 in March.
That, Snowden said, “underscores the investment community’s confidence in our digital transformation and our position as the nation’s largest regional gaming operator. This milestone is a testament to the hard work, determination and commitment of all our team members at the property and corporate levels as well as our valued partners at Barstool Sports.”
The company said the strong results were driven by contributions from the online platforms, and land-based gaming properties despite COVID-19 related closures in Pennsylvania and Illinois for parts of January, and Zia Park in New Mexico not reopening until early March.
When adjusting for the days the casinos were mandated to close and excluding the contribution from Penn Interactive, revenues declined 9% and adjusted EBITDAR increased 12%, which equates to margin improvement of more than 700 basis points compared to the first quarter of 2019.
Snowden said visitation and
“The broader acceptance of sports betting and the greater consumer adoption of technology, which was accelerated by the ongoing pandemic, have been some of the key drivers behind our strategic initiatives.” Penn National President and CEO Jay Snowden
length of play continue to improve across all customer age segments and the company saw volumes in the month of March that it had not seen since 2019.
“With a very strong start to 2021,” Snowden said, “our goal is to continue to disrupt the gaming industry and position Penn National for ongoing growth through unconventional and fresh approaches. The broader acceptance of sports betting and the greater consumer adoption of technology, which was accelerated by the ongoing pandemic, have been some of the key drivers behind our strategic initiatives.”