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Caesars considers other ways to grow results
30 July 2013
By Howard Stutz
LAS VEGAS — Caesars Entertainment Incorporated is looking at other ways to grow results after reporting another quarterly net loss.
The casino operator, which has more than 50 gambling properties across the U.S. & Canada, in addition to 10 on or near the Strip, is developing new resorts with an emphasis on nongaming amenities. The company moreover hopes to shortly launch a real money online poker website in Nevada.
Caesars asserted Monday it lost $212.2 million in the quarter in that ended June 30. The loss translated in to a loss per share of $1.69. A year ago, Caesars asserted it lost $241.7 million, or $1.93 cents per share.
The company has not reported a positive quarter since going public in February 2012.
Revenues for Caesars declined less than 1 % to $2.158 billion.
Analysts polled by FactSet Research expected Caesars to report a net loss of $1.40 per share.
“Overall 2nd quarter results were slightly weaker than our expectations & missed the consensus estimate by more,” RBC Capital Markets gaming analyst John Kempf told investors. “Las Vegas, Atlantic City & Lousiana-Mississippi led the declines & were the primary reason for the variance to our numbers.”
In Las Vegas, Caesars asserted net revenues fell 4.5 % to $745.9 million.
Caesars asserted construction activities associated with the $550 million Linq development, beautification of the Quad & the renovation-related closure of Bill’s Gamblin’ Hall caused a decline in revenues.
In the Atlantic City division, which includes Caesars’ four Atlantic City hotel-casinos & a Philadelphia racetrack casino, total revenues fell 8.3 percent.
Caesars asserted gaming revenues companywide declined 7.5 % in the quarter. Company Chairman Gary Loveman asserted nongaming revenues might shortly replace the diminishing casino numbers.
“While challenging conditions in the gaming industry impacted our gaming revenues during the 2nd quarter, we are beginning to observe positive underlying trends resulting directly from the investments we have made to enhance our hospitality footprint, particularly in Las Vegas,” Loveman asserted in a statement. “Our performance moreover reflects our focus on managing operating expenses without sacrificing service.”
During a conference call with analysts, Loveman pointed out the company’s development projects, in addition to the Linq, which is expected open after this year.
When asked by an analyst about the nongaming Linq taking customers out of casinos, Loveman asserted the development’s restaurants & clubs are meant to attract younger Las Vegas NV visitors.
“I’m trying to pull customers out of our competitors’ casinos,” Loveman said. “Linq is a sound investment in a favorable location with a very unique offering.”
The Quad, formerly the Imperial Place, has completed beautification of 40 % of its casino floor. The $180 million Gansevoort Las Vegas, which is replacing Bill’s, is expected to open in the 2nd quarter next year.
Also on the Strip, Caesars is renovating more than 700 rooms at Bally’s Las Vegas.
Caesars broke ground earlier this month on the $400 million Horseshoe Casino Baltimore, which is expected to open in 2014, & a $125.8 million convention center at Harrah’s Atlantic City. The 250,000-square-foot facility will have 125,000 square feet of space for corporate meetings, complementing the Atlantic City Convention Center, which targets conventions & tradeshows.
Loveman asserted the company expects to launch a World Series of Poker branded website in NV following final state regulatory approval.
Eilers Research gaming analyst Adam Krejcik estimated Caesars’ revenues from its social gaming endeavors, in addition to the Playtika site on Facebook, were $71.4 million, up 44 % from a year ago.
Caesars asserted its total long term companywide debt was $23.7 billion as of June 30.
The company reported earnings after the close of trading on the stock markets. Shares of Caesars Entertainment rose 10 cents to $15.58, a 0.65 % increase on the New York Stock Exchange.
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