Caesars Entertainment takes second-quarter loss, but CEO touts ‘a number of key milestones’ reached
Las Vegas-based Caesars Entertainment, which operates nine resorts in Las Vegas and a diversified portfolio of properties worldwide, reported its second-quarter earnings Monday.
Company: Caesars Entertainment Corp. (NASDAQ: CZR)
Revenue: $2.16 billion (down 0.3 percent from the second quarter of 2012). A 7.5 percent decline in casino revenue was partially offset by increases in non-casino revenue. The most significant decline was in Atlantic City as a result of competitive pressures.
Earnings: A loss of $212.2 million (an improvement of 12.2 percent from the second quarter of 2012). Losses narrowed as a result of shedding debt and discontinuing operations with the sale of Baluma S.A., which operated Conrad Punta del Este Resort and Casino in Uruguay.
Earnings per share: A loss of $1.69 (an improvement of 12.4 percent from the second quarter of 2012).
Quote: “We reached a number of key milestones against our strategic initiatives in recent months, including breaking ground on Horseshoe Baltimore, setting a new attendance record at the World Series of Poker, beginning construction on our meetings facility in Atlantic City and executing on our hospitality investments in Las Vegas. While challenging conditions in the gaming industry impacted our gaming revenues during the second quarter, we are beginning to observe positive underlying trends resulting directly from the investments we’ve made to enhance our hospitality footprint, particularly in Las Vegas.” — Caesars Chairman, President and CEO Gary Loveman
What it means: Caesars’ Las Vegas revenue continued to be negatively impacted by construction of the company’s Linq project on the Strip, the renovation of the Quad and the closure of Bill’s Gamblin’ Hall & Saloon, which will reopen in early 2014 as the Gansevoort Las Vegas.
The average daily room rate climbed in Las Vegas from $95 to $103 as a result of the company’s decision to add resort fees.
Las Vegas net revenue declined 4.5 percent to $745.9 million compared with the second quarter of 2012. Casino revenue was off 15.5 percent due to weaker gaming volumes, a decline in hold percentage and the renovation projects at the Quad and Bill’s.
Food and beverage revenue increased 8.9 percent, attributed in part to the addition of Bacchanal Buffet and Nobu and Caesars Palace and Gordon Ramsay-branded restaurants at Caesars Palace, Paris Las Vegas and Planet Hollywood.
Lovemen said there is increased revenue potential at the Linq when it opens later this year and at the High Roller observation wheel that will open early next year. He added that the company’s World Series of Poker event drew record attendance and offered its second-highest prize pool, and the company is awaiting regulatory approval and activation of Nevada’s second real-money Internet poker site.