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Pinnacle Entertainment said Monday it was able to increase net income, revenue and earnings per share during the third quarter despite a seemingly anti-gaming stance by Mother Nature.
Gulf Coast hurricanes in August and September closed three of the Las Vegas-based casino operator's seven major casinos during those months. Two of the casinos reopened. A third, Casino Magic in Biloxi, Miss., was destroyed by Hurricane Katrina on Aug. 29.
Pinnacle said quarterly revenue was $189.5 million, up 29.4 percent from $146.5 million for the same time period a year ago. The bulk of the jump was attributed to L'Auberge du Lac, the company's $365 million Lake Charles, La., casino that opened in May.
L'Auberge had revenue of $51.5 million despite being closed for nine days in September after Hurricane Rita hit the western Louisiana community. The property's casino reopened Oct. 8, but during much of September, people displaced by Hurricane Katrina were housed at L'Auberge's 750-room hotel.
In its earnings statement, the company said the people staying at the property "understandably" gambled less than the casino's usual clientele.
Pinnacle reported net earnings of $5 million, compared with a loss of $3.2 million a year. Earnings per share was 12 cents, reversing a loss of 9 cents the third quarter of 2004. Analysts polled by Thomson First Call had estimated the company would earn 10 cents per share in the quarter.
Pinnacle's riverboat casino in New Orleans was closed for five weeks following Hurricane Katrina, but reopened Sept. 30. Because of the hurricane-related disruption, revenue fell from $27.8 million in the third quarter of 2004, to $19.5 million for period ending Sept. 30
Most of the casino's customers reside in the West Bank area across the Mississippi River from downtown New Orleans, which had minimal hurricane damage. Therefore, the company said, revenue that will be reported in the fourth quarter, has "been above those experienced" before the hurricanes.
"This was clearly a complicated period for us, given hurricanes Katrina and Rita," Pinnacle Chairman Dan Lee said in a statement.
It's unclear whether Casino Magic in Biloxi, which contributed revenue of $13.3 million in the quarter before it was closed, will be rebuilt. The company said it could take six months to decide if the property is worth saving. If it decides not to rebuild Casino Magic, Pinnacle said, it believes it could take the insurance payment and apply it toward construction on one of two casinos the company is building in St. Louis.
"We continue to work with our advisers and insurers to calculate our insured losses, including business interruption insurance," Lee said. "To date, we have received $25 million from our insurers toward resolution of our insurance claims and expect to receive substantially more in future periods."
Pinnacle shares were unchanged Monday in trading on the New York Stock Exchange, closing at $20.65.
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