Futures aren’t predictable, Gaming and Leisure Properties CEO Peter Carlino said; the best anyone can do is plan ahead. But observers may have felt a flash of surprise if they’d expected the regional gambling market-favoring executive to stick to his past statements about eschewing the Las Vegas Strip as a site for acquiring property.
On the real estate investment trust’s third quarter-earnings call Friday, Carlino told analysts and journalists that Las Vegas had shaken off the pandemic and regained its footing faster than he thought it would. Therefore, maybe Gaming and Leisure, which already owns the land under the Tropicana, might consider acquiring more property on the Strip.
Meanwhile, Wyomissing, Pennsylvania-based Gaming and Leisure posted a key cash-flow measure and revenue that topped Wall Street forecasts.
In a statement, Gaming and Leisure said its funds from operation were $232.8 million, or 88 cents per share, for the three months ended Sept. 30, up from $209.1 million, or 89 cents per share, a year earlier.
Adjusted funds from operation, a cash-flow measure excluding one-time costs, were 89 cents per share, topping the 85-cents-per-share consensus forecast of analysts surveyed by Seeking Alpha. Funds from operation are a closely watched fiscal yardstick for real estate investment trusts; it takes net income and adds back depreciation and amortization.
Earnings before interest, taxes, depreciation, and amortization, a different cash-flow measure that excludes one-time costs, rose 11.7 percent to $308.8 million from $276.7 million.
Revenue rose 11.8% to $333.8 million from $298.7 million and topped the $331.5 million consensus forecast of Seeking Alpha-polled analysts.
In the conference call, Carlino, as ever, stressed his belief in regional gaming real estate, calling it highly attractive compared to other real estate investments.
“As the world focuses on risk and risk-adjusted returns, our business model shines brightly,” he said He later added, “At a time when uncertainty persists, you can be certain that our do-it-right sleep-at-night balance-sheet philosophy will help guide prudent decisions.”
Preparation has guided that strategy, Carlino said, helping Gaming and Leisure grow from being a landlord with one tenant and 19 properties to a landlord with six tenants with 57 properties across 17 states in its nine-year existence.
But when queried in the question-and-answer session, Carlino said the Strip could enter Gaming and Leisure’s future preparations if it’s fiscally feasible and sensible. “Vegas, I was a bit more cautious about it. And I was wrong,” he said. “So, look, it’s only about money. … We’d love to have Strip properties.”
Carlino said Gaming and Leisure plans to finance a new $100 million hotel tower Penn Entertainment’s plans to build in Columbus, Ohio, and add a hotel tower at the M Resort in Henderson, Nevada. The projects are part of Penn’s $850 million expansion, which also includes moving riverboat casinos in Aurora, Illinois, and Joliet, Illinois.
Gaming and Leisure Properties shares rose $2, or 4.35% to close at $49.95 on the Nasdaq Stock Market. The shares slipped 80 cents, or 1.6%, after hours, to settle at $49.15.
