An operating unit’s shedding of bankruptcy and the federal tax overhaul helped casino giant Caesars Entertainment Corp. post first-quarter earnings and reverse a year-earlier loss.
In a statement Wednesday, Las Vegas-based Caesars Entertainment, which operates 10 hotel-casinos on the Strip, said it earned $2 billion, or $2.48 a share, for the three months ended Dec. 31, reversing a loss of $463 million, or $3.15 a share, a year earlier. A $2.03 billion tax benefit helped boost the most recent results; also Caesars Entertainment Operating Co.. emerged from bankruptcy in October.
Fourth-quarter revenue rose to $1.9 billion from $949 million.
The earnings-per-share result topped the 8-cents-per share estimate of analysts polled by FactSet.
Caesars said its revenue per available room for Caesars Entertainment’s Las Vegas venues rose 3.9 percent, buoyed by improved rates from additional renovated rooms and overall strength in hospitality management.
Macquarie Securities gaming analyst Chad Beynon, in a note to investors Wednesday night, said positive regional trends and continuous improvement on margins keeps Caesars “a very attractive large-cap gaming stock.”
Beynon expects other analysts “to crunch the numbers and come out with an outlook as positive as us.”
The company, which operates properties 47 casinos in 13 states and five countries under the Caesars, Bally’s, Flamingo, Grand Casinos, Hilton and Paris brand names, also said improved efficiency reduced year-over-year marketing expense 4 percent.
“Same-store gaming revenue increased companywide for the full year despite unfavorable hold of approximately $80 million,” Caesars Entertainment CEO Mark Frissora said in a statement accompanying the earnings. “In 2018, we will continue to invest in our core business while pursuing attractive growth opportunities, including our acquisition of Centaur Gaming.”
Caesars Entertainment in November agreed to buy Centaur Holdings LLC, a privately owned casino and horse racing company, for $1.7 billion in cash. The deal helps Caesars expand in Indiana.
Indianapolis-based Centaur served more than 6.5 million guests and more than 1.1 million loyalty program members annually across its properties.
The Motley Fool posted this month that if Caesars is seeking an industry-shaking acquisition, it should consider targeting Wynn Resorts Ltd., which lost its CEO after Steve Wynn stepped down amid sexual harassment accusations. In a March 2 post, Motley Fool reporter Travis Holum speculated that Caesars could use its real estate investment trust, VICI Properties, to fund part of the acquisition by buying the land under Wynn Las Vegas, Wynn Boston Harbor and 38 acres across the Strip from Wynn Las Vegas.
The Las Vegas Review-Journal noted that the gaming industry hasn’t seen an acquisition of a company the size of Wynn Resorts since private equity investors took Caesars Entertainment private in 2008.
For the 12 months ended Dec. 31, Caesars Entertainment said its loss was $375 million, or $1.35 per share. Full-year revenue was $4.85 billion.
Caesars Entertainment shares rose 15 cents, or 1.21 percent, Wednesday to close at $12.50 on the New York Stock Exchange.
