Casino operator Boyd Gaming Corp said Wednesday that quarterly profit fell 41 percent as consumers spent less, particularly at its Las Vegas properties.
Company management expressed little confidence of an imminent upturn, and shares fell over 3 percent.
Business trends may have stabilized, but we're not currently seeing any indications that point to a meaningful recovery in the short term, Chief Executive Keith Smith said on a conference call. We believe the worst is clearly over, but challenging times still lie ahead.
Boyd's second-quarter net income dropped to $12.8 million, or 15 cents a share, from $21.7 million, or 25 cents a share, a year earlier.
Excluding one-time items, profit matched analysts' average forecast of 12 cents a share, according to Reuters Estimates.
Revenues and EBITDA (earnings before interest, taxes, depreciation and amortization) fell year over year and were mixed relative to our expectations, Oppenheimer analyst David Katz said in a research note.
EBITDA at Boyd's Las Vegas casinos, which cater to local residents rather than tourists, fell 30 percent.
The Las Vegas-based company said net revenue fell 8 percent to $423 million, short of the $431.6 million forecast by analysts.
Earlier this year, Boyd offered to acquire most of the assets of competitor Station Casinos Inc [STN.UL] but was turned down. Station said last week that it had filed for bankruptcy protection for some nonoperating subsidiaries but would keep its casino operations out of court.
Boyd said on Wednesday it is still interested in acquiring some or all of Station's assets.
We are having ongoing conversations, Smith said.
Citing financing problems, Boyd, which owns and operates 16 casinos in six states, last year suspended work on its partially built Echelon project on the Las Vegas Strip.
The CEO said Boyd has not considered an outright sale of the project but is looking at options including joint ventures, partnerships or changes to Echelon's size and scope.
The company said last week that New Jersey authorities would hold a hearing on the renewal of a gaming license held by the Borgata resort in Atlantic City, a joint venture of MGM Mirage (MGM.N) and Boyd. At issue is MGM's Macau joint venture with the daughter of Chinese casino mogul Stanley Ho.
Queried about what would happen if MGM were to withdraw from Borgata, Boyd officials said all contingencies are addressed in the two companies' confidential joint venture agreement.
If the opportunity comes up, we will address it then, Smith said.
Shares of Boyd, which have traded as low as $2.81 and as high as $14.92 over the past year, were down 31 cents to $9.63 in afternoon trade on the New York Stock Exchange.
(Reporting by Deena Beasley and Karen Jacobs; Editing by Gerald E. McCormick and John Wallace)