Lower spending in Midwest, South, downtown Las Vegas leads to loss for Boyd Gaming
Las Vegas-based Boyd Gaming — operator of the Fremont, Main Street Station and California in downtown Las Vegas; the Orleans, Gold Coast, Suncoast, Sam's Town, Joker's Wild and Eldorado neighborhood casinos in Southern Nevada; riverboat properties in six states; and 50 percent owner of Borgata in Atlantic City — reported its third-quarter earnings Thursday.
Company: Boyd Gaming Corp. (NYSE: BYD)
Revenue: $738.6 million (up 20.3 percent from the third quarter of 2012). Executives were happy with the performance of its Borgata property, a 50 percent venture with MGM Resorts International, but disappointed in results in the Midwest and South. Cash flow grew in the Las Vegas locals market for the third straight quarter.
Loss: $37.3 million (loss widened by 135.9 percent from the third quarter of 2012). Executives said casual players pulled back their spending in the Midwest and South during the quarter and downtown Las Vegas visitation was off in September, attributed to construction projects in the area.
Loss per share: 37 cents (loss widened by 105.6 percent from third quarter of 2012).
What it means: While net revenue grew 1.1 percent to $140.3 million in the Las Vegas locals market, it fell 1.5 percent to $52.7 million downtown.
Boyd will expand its Penny Lane slot machine brand to all its Las Vegas locals casinos as well as its Midwest and South properties.
Boyd is the first company to be licensed for Internet gaming in New Jersey. The company plans an aggressive marketing program to attract customers to the site, which will be branded with the Borgata property.
In Nevada, the company will soon launch an online sports betting system to compete with locals rival Station Casinos.
Quote: "Our third-quarter performance fell below our expectations, as solid results in July and August were offset by significant weakness in September in many of our markets. However, October year-over-year results have shown improvement in most of our operations." — Boyd Gaming President and CEO Keith Smith