Boyd Gaming has ‘challenging’ quarter
Boyd Gaming Corp. posted a loss in the first quarter after being hurt by a hefty impairment charge, as well as revenue declines in its Hawaii-based charter package subsidiary, Las Vegas and other markets.
Adjusted earnings, however, beat analysts' expectations.
Vacations Hawaii, which runs charter flights six days a week to Las Vegas from Honolulu, saw its revenue fall 6.5 percent to $10 million from $10.7 million.
Revenue slipped 4.5 percent to $60.9 million from $63.8 million at Boyd's downtown Las Vegas properties. Many Hawaii residents frequent Boyd properties in that district, including the California Hotel and Casino, the Fremont Hotel and Casino and the Main Street Station Casino, Brewery and Hotel.
Overall, the Las Vegas-based casino operator swung to a loss of $32.6 million, or 37 cents a share, from a profit of $217.9 million, or $2.46 per share, a year earlier.
The results included an $84 million impairment charge related to a write-off of the license rights to operate slot machines at Dania Jai-Alai in Dania Beach, Fla.
The company completed the purchase of the property during the 2007 first quarter, but has indefinitely postponed redevelopment plans due to the opening of a nearby Native American casino, weak performance of other gaming venues in the area and concerns about additional casino gambling venues being added in Florida.
"We experienced a challenging quarter, as consumers pulled back on discretionary spending," President and Chief Executive Keith Smith said.
The gaming sector, as well as many other industries, has been pressured as consumers curb spending due to the ongoing housing downturn, escalating food and fuel costs, eroding credit and recession worries.
Excluding the charge, profit fell to $29.6 million, or 34 cents a share, from $44 million, or 50 cents a share, last year.
Analysts surveyed by Thomson Financial, on average, expected earnings of 32 cents a share.
The year-ago period included a $285 million gain related to the sale of the former Barbary Coast Hotel & Casino in Las Vegas to Harrah's Entertainment.
Revenue fell 9 percent to $471.1 million, from $517 million last year, with declines across several markets, including casinos frequented by Las Vegas locals, the Midwest and the South.
Revenue missed Wall Street's expectations for $481.6 million.
Boyd said on a conference call that it is forecasting second-quarter earnings per share from continuing operations to range from 28 cents to 33 cents. Analysts are looking for 33 cents a share.
Separately, Boyd declared a dividend yesterday of 15 cents a share that will be payable June 2 to shareholders of record as of the close of business on May 14.