Caesars Entertainment posts $908.1 million loss in Q3

LAS VEGAS -- Caesars Entertainment Corporation lost $908.1 million in the third quarter despite a 6 percent increase in revenue, the casino company said Monday.

The financial results were somewhat overshadowed as Las Vegas-based Caesars said it was continuing formal negotiations with lenders and creditors aimed at reducing the company’s gaming industry high debt.

In the quarter that ended Sept. 30, Caesars said its debt was $22.88 billion, down from $24.2 billion at the end of June.

The company has been in private talks with banks and lenders since September with the hopes of restructuring a portion of the debt. Bloomberg News has reported the discussions cover $18.3 billion.

On a conference call with analysts Monday, Caesars Entertainment Chairman Gary Loveman said the casino operator wouldn’t provide any further information about the negotiations. He said the company was “keenly focused on deleveraging” the balance sheet.

“While it is premature to report on the details of these negotiations with creditors, it is fair to say that the talks have been constructive,” Loveman said. “Further, we are intensely focused on ensuring operating costs are aligned with the current environment to enhance (Caesars) profitability.”

Last month, Caesars said in a filing with the Securities and Exchange Commission that one of its lenders — reportedly a New York-based hedge fund — walked away from the talks.

Caesars operates more than 50 casinos nationwide, including nine resorts on or near the Strip. The company said its net loss for the quarter was 19.3 percent higher than its net loss of $761.4 million in the same quarter a year ago.

The loss translated into a net loss per share of $6.29.

Net revenue for the quarter, however, was $2.212 billion, fueled mainly by increases from the company’s social and mobile gaming operations.

Loveman said the increase in revenue reflected “strength in the interactive business, stabilizing trends regionally, and generally good performance in Las Vegas.”

He said an “unfavorable hold” in the casino at Caesars Palace cost the company $35 million in operating income during the quarter. Loveman told analysts the company was encouraged by year-over-year increases in key Las Vegas tourism indicators, including Strip hotel occupancy, airport traffic, average daily room rates, revenue per available room, and convention attendance.

Among the company’s Strip operations are Bally’s - Las Vegas, Harrah’s Las Vegas Casino & Hotel, Caesars Palace, the Flamingo Las Vegas and the off-Strip Rio All-Suite Hotel & Casino.

“The trend reinforces our confidence in the investments we have made on the Strip,” Loveman said. “Our new investments in Las Vegas have added significant value to our portfolio.”

In addition to poor hold on wagers at Caesars Palace, several properties had hotel rooms taken out of service during the quarter due to renovations.

The room remodelings will continue for several quarters, however, Loveman said the company continues “to view the Las Vegas market with optimism.”

Caesars Acquisition Co., which is 58 percent owned by Caesars Entertainment, said its net income in the quarter of $2.8 million, or 2 cents per share, in its third quarter.

The company, which operates as Caesars Growth Partners, said its net revenue in the quarter was $485.8 million, an increase of 49.1 percent. The company’s casino operations benefited by the reopening of The Cromwell in May and opening of The Horseshoe Casino Baltimore in August.

Revenue from the company’s interactive gaming division, which includes the World Series of Poker, WSOP.com in Nevada and online gaming in New Jersey, grew almost 105 percent to $161.6 million.

During a conference call with analysts, Caesars Growth CEO Mitch Garber said the company would continue to be active on the acquisition side, primarily in the interactive business.

“For us it’s been a buyers market all along, because we complemented the businesses that we have bought,” Garber said.

Caesars Acquisition reported earnings before the stock markets opened. Shares of the company fell 6 cents or 0.58 percent to close at $10.31 on the Nasdaq. Caesars Entertainment, which is also traded on the Nasdaq, saw its share price decline 56 cents or 4.63 percent to close at $11.54. The company reported earnings after the markets closed.