Boosted by online poker, Station Casinos posts best 2nd quarter in 5 years
Las Vegas Sun
Station Casinos, the largest locals casino company in Southern Nevada and operator of the Red Rock Resort, Green Valley Ranch, Station-, Fiesta- and Wildfire-branded casinos, reported second-quarter earnings Wednesday.
Company: Station Casinos LLC
Revenue: $316.6 million (up 1.4 percent from the second quarter of 2012). The company was boosted by two months of operations by Fertitta Interactive, the company’s real-money online poker subsidiary that operates under the Ultimate Poker brand. Station Executive Vice President and Chief Financial Officer Marc Falcone told analysts in a conference call that Ultimate Poker operations have exceeded the company’s expectations.
Earnings: $7.3 million (up 11.4 percent from the second quarter of 2012).
Quote: “Our ability to manage operating expenses without compromising our highest level of guest service led to another quarter of impressive results.” — Station Executive Vice President and Chief Financial Officer Marc Falcone
What it means: Station measures performance by earnings before interest, income taxes, depreciation, amortization and management fees, and reported its best second quarter in five years. Using that measure, adjusted EBITDAM for the quarter was $96.1 million, a 4.7 percent increase over the second quarter of 2012.
Falcone told analysts in the company's conference call that the Las Vegas gaming industry has not fully benefited from some of the state's positive economic trends, but that the Southern Nevada market is performing better than most other domestic gaming markets.
He said he thinks consumers continue to be negatively affected by the higher Social Security payroll tax and that Station's performance has been affected by "irrational behavior by competitors in our market" without specifically naming them.
In addition to beginning to operate the first intrastate online poker site in the United States on April 30, the company announced it had signed an operations agreement with Taj Mahal Associates LLC, which is pursuing an online gaming license in New Jersey. Falcone said Station has submitted its required applications to New Jersey regulators and that he expects to see reviews by November. Falcone said that it's too early to determine the potential size of the New Jersey market.
The company also announced that construction of the Graton Resort & Casino in Northern California is on schedule to open in November.