Caesars Entertainment Corp.'s (CZR) second-quarter loss widened
as the casino operator booked a write-down on its Macau land
concession and roughly flat revenue from fewer visits to some key
U.S. casinos.
Casino giant Caesars has struggled to recover fully from the
recession, and hasn't posted a profit since late 2009. Revenue has
generally followed an upward trend in the past year, helped by
customers' return to Las Vegas. But a U.S. gambling comeback has
recently slowed, and Caesars remains burdened by debt, which makes
it particularly vulnerable to periods of weaker demand, Moody's
Investors Service said in June.
"After a strong first quarter, difficult economic conditions led
to lower visitation in several regions, impacting our core
operating results in the second quarter," said Chief Executive Gary
Loveman. Though the economy may continue to pose challenges, said
Mr. Loveman, the company will focus on controlling costs and
investing in growth.
Caesars has looked to expand domestically, and in May opened a
joint venture casino in Ohio with Rock Gaming LLC. Also this
quarter, it agreed to sell its Harrah's St. Louis casino to Penn
National Gaming Inc. (PENN) for $610 million. As its competitors
thrive in booming Macau, Caesars has been unable to acquire a
gambling license there.
For the second quarter, Caesars posted a loss of $241.7 million,
or $1.93 a share, compared with a year-earlier loss of $155.5
million, or $1.24 a share. The latest quarter included a noncash
impairment charge of $101 million related to the company's land
concession in Macau, and higher depreciation expenses in Las
Vegas.
Revenue was roughly flat at $2.17 billion, from $2.16 billion a
year earlier.
Analysts polled by Thomson Reuters were expecting a loss of 94
cents a share on revenue of $2.28 billion.
In Caesars' Las Vegas segment, revenue fell 0.7%, as trips
increased but per-trip spending decreased. Net revenue from
Atlantic City declined 8.6% on fewer visits. Revenue from the Iowa
and Missouri region shrank 2.3%, while the Illinois and Indiana
segment reported a 1% drop.
The company's Louisiana and Mississippi segment booked a 2.3%
revenue increase.
Shares declined 1.2% to $8.37 in after-hours trading. In its
February initial public offering, Caesars floated shares at $9
apiece.
Write to Kristin Jones at kristin.jones@dowjones.com
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