Boyd Gaming sees second quarter profits plunge

4 August 2010

LAS VEGAS, Nevada -- Boyd Gaming Corp. executives weren't taking the bait.

With the Las Vegas-based casino operator dropping out of Friday's planned bankruptcy court auction of several Station Casinos' properties, Wall Street speculated on the next potential acquisition target for the Las Vegas-based casino operator.

But company leaders didn't go along.

Boyd Gaming had just explained Tuesday how the recession left consumers skittish, causing the company's second-quarter profits to fall 73 percent, when the questions started.

Union Gaming Group Principal Bill Lerner asked point blank if Boyd Gaming had participated in a rumored privately held bank-back auction of M Resort. Company Chief Financial Officer Josh Hirsberg was noncommittal.

"We don't comment on speculation," Hirsberg said. "We do believe the best opportunities for us are in the locals market. Buying an existing property is a much better opportunity than building something from the ground up."

Which means Echelon, the company's mothballed $4.8 billion Strip development, which halted construction two years ago, will sit well into the next decade until the market turns.

Until then, Boyd executives will keep their interests focused on buying opportunities around the country.

"We have confidence in the locals market. We believe it will recover," said Boyd Gaming CEO Keith Smith. "We believe there will be opportunities that will present themselves and will be a strategic fit for our company."

Boyd earned $3.4 million during the three-month period that ended June 30, or 4 cents a share. A year ago, Boyd Gaming reported net income of $12.8 million, or 15 cents a share. Analysts polled by FactSet Research expected a profit of 10 cents a share.

Net revenues during the quarter declined 5.9 percent to $578.4 million compared with $614.5 million collected a year ago.

"The lingering effects of the recession have left consumers unusually sensitive to shifts in the economy, and they now react more quickly to economic data and other developments, such as fluctuations in the stock market," Smith said. "Although conditions remain uncertain, we believe long-term stabilizing trends are still in place, and that year-over-year growth is achievable by the end of 2010."

Wall Street analysts said they were somewhat disappointed by the company's results but were more interested in hearing about future plans following Friday's announcement it was no longer interested in pursuing a purchase of assets from bankrupt Station Casinos.

Boyd didn't provide much information about buying MGM Resorts International's up-for-sale 50 percent share of the Borgata in Atlantic City, which the company operates.

Net revenues fell from $191.5 million to $186.9 million at Borgata. Adjusted cash flow was off 9.9 percent. Boyd said Borgata's performance was hurt by higher promotional activity from competitors in Pennsylvania, higher utility costs due to unseasonably hot weather and reduced day-trip visitation to Atlantic City during June.

"It's MGM's process to run with and we'll see how that unfolds," Smith said. "Once MGM has a third-party offer, they will bring it to us and we have a chance to match it."

During the quarter, Boyd Gaming's revenues and cash flows were down in every operating segment.

"Property results were lower than our estimates in most markets," Jefferies and Co. gaming analyst David Katz said.

In the Las Vegas locals market, net revenues were $153.1 million, down from $166.1 million, while adjusted cash flows declined 16.2 percent. The company's downtown casinos generated net revenues of $55.2 million, compared to $57.6 million a year ago, while adjusted cash flow was off 21.2 percent.

The results weren't better in the Midwest and South, where Boyd Gaming recorded $181.7 million in net revenues, compared with $197.3 million in the same quarter of 2009. Adjusted cash flows were off 20.9 percent.

Related Links
Boyd Gaming Corporation Gaming Vendor Information
Nevada Gambling


Copyright GamingWire. All rights reserved.
Featured Vendors
Casino Network
.Dot-iGaming.com
Casino Network
20+ years experience selling refurbished slot machines, parts & glass for all major brands
.Dot-iGaming.com
Fully loaded advanced casino platform. One time (low) fee, 100% your property, start now!
Plastic Card ID
Sunkist Graphics, Inc.
Plastic Card ID
The World’s Lowest Prices on Printed Plastic Cards and Card Printers!
Sunkist Graphics, Inc.
Specializing in the creation of best-of-breed gaming graphics - slot glass, sign faces, and more
Oklahoma Indian Gaming Association (OIGA) Conference
Casino City Press
Oklahoma Indian Gaming Association (OIGA) Conference
The biggest little show in Indian gaming! Save the date: Aug 9-11, 2022 in Tulsa!
Casino City Press
A leading publisher and distributor of casino and gaming business data and market research reports.
Slot Machines Unlimited
Imagine This
Slot Machines Unlimited
Exporter of IGT, Williams, AVP, Trimline, Aristocrat, Konami, Bally, & parts over 20 yrs experience
Imagine This
Imagine This #1 Source for Player Gifts. Over $50 million in stock ready to ship! Let us serve you!
TOP ONE TECH LIMITED
TDN Money Systems
TOP ONE TECH LIMITED
GLOBAL TOUCH SOLUTION PARTNER OF CHOICE,10+ years OEM manufacturing,100+ thousand units application
TDN Money Systems
Cage, cash/chip handling experts representing CountR, ARCA, AccuCASH, Fujitsu & NCR
Global Gaming Expo (G2E)
AmericanChecked
Global Gaming Expo (G2E)
The largest gathering of global, commercial and tribal gaming professionals in North America.
AmericanChecked
Background checks for the gaming industry with key & non-key packages & fingerprinting solutions
Broadband Hospitality
Casino Schedule Ease
Broadband Hospitality
Improve these critical guest-facing amenities: In-room TV, Wi-Fi, Mobile App. Priced right. All here
Casino Schedule Ease
Get a 90-Day Free Trial of 100% contactless, customizable table game & full casino scheduling
Betson Imperial Parts & Service
Talisman Group Creators of EZ Baccarat
Betson Imperial Parts & Service
Your one stop shop for all your gaming and OEM needs!
Talisman Group Creators of EZ Baccarat
With over 800 tables in 150+ casinos, EZ Baccarat is the number one brand in baccarat.
Rymax Marketing Services, Inc.
Kallop
Rymax Marketing Services, Inc.
Leader in creating award winning player & employee loyalty programs & events proven to increase ROI
Kallop
Reward every play like a VIP with exclusive luxury brands at affordable prices.


Your Guide to 15,358 Gaming Industry Suppliers