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LAS VEGAS, Nevada -- A day after Penn National Gaming blew away earnings projections, Pinnacle Entertainment backed up Wall Street's thesis that regional gaming markets are showing small signs of recovery.
Pinnacle, which is based in Las Vegas but operates primarily in the South and Midwest, beat analysts' expectations Friday when the company announced its first-quarter earnings.
The casino operator, which owns Boomtown in Reno, reported a net income of $900,000 in the quarter ended March 31, or earnings of 2 cents per share. The results were below what the company earned in first quarter of 2008, which was $5.1 million or 8 cents per share.
Analysts polled by Thomson Reuters expected the company to lose 3 cents a share in the quarter.
Revenues for Pinnacle increased 4.7 percent to $269 million from $257 million.
"We view Pinnacle's results as another positive sign for the regional casino operators," Goldman Sachs gaming analyst Betsy Gorton told investors.
The analyst said riverboat casinos, racinos and regional properties operated by Pinnacle, Penn National and Ameristar Casinos are benefiting as gamblers are staying closer to home and spending what discretionary dollars they have available within their state boundaries.
Pinnacle said revenues grew almost 9 percent during the quarter at L'Auberge du Lac, the company's flagship property in Lake Charles, La., and by almost 40 percent at Lumiere Place in St. Louis. Other Pinnacle casinos showed either modest revenue increases or decreases.
"Our properties continued to perform well overall in the first quarter," Pinnacle Chairman and Chief Executive Officer Dan Lee said in a statement. "In particular, Lumiere Place continued to show dramatic progress in the first quarter of 2009.
Oppenheimer gaming analyst David Katz said Pinnacle's results were stronger than his expectations.
"The results support our view of the relative strength of results in the regional markets," Katz said.
Shares of Pinnacle increased as much as 23 percent in trading Friday on the New York Stock Exchange before settling back. Pinnacle closed at $11.60, up 67 cents, or 6.24 percent.
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