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Pinnacle delays opening of Louisiana casino

29 April 2011

BATON ROUGE, Louisiana -- Regional casino operator Pinnacle Entertainment told investors Thursday the opening of its hotel-casino project in Baton Rouge, La., would be delayed several months.

The Las Vegas-based company said unusually high Mississippi River water levels had slowed construction of its $357 million development, pushing the planned opening from the first quarter of 2012 to the summer.

"Overall, we don't view a three-to-four month delay as a negative; however, given this is the second delay in two quarters, it is frustrating," JP Morgan Gaming analyst Joe Greff told investors.

The yet-to-be-named property will have 206 hotel rooms, a casino with 1,500 slot machines and 51 table games, a multipurpose event center, and restaurant and entertainment venues.

Pinnacle said the floating casino's three hulls were recently moved from the shipyard to the project site.

Pinnacle said the company saw first-quarter revenues grow 9.6 percent in the period that ended March 31. Pinnacle, which operates hotel-casinos in the South and Midwest, said revenues were $287.7 million, compared with $262.6 million in the same quarter last year.

The company's net income for the quarter was almost $2.4 million, or 4 cents per share, compared with $36.7 million, or 60 cents per share in the 2010 first quarter. A year ago, the company's net income included a gain of $35.8 million, or 59 cents per share, net of taxes, from discontinued operations.

During the quarter, Pinnacle's two St. Louis area casinos grew cash flow by almost 30 percent, while the company's flagship L'Auberge du Lac Casino Resort in Lake Charles, La., saw cash flow increase 6.4 percent and revenues increase 2.8 percent.

"These improvements reflect the ongoing implementation of operating strategies focused on providing best-in-market experiences for our guests and improving our own internal processes," Pinnacle Chief Executive Officer Anthony Sanfilippo said in a statement.

During a conference call with analysts, Sanfilippo said Pinnacle's properties are seeing increased spending per customer. Weather issues have negatively affected some of the company's Midwest casinos during April.

"(Similar) sentiments that have been echoed by several other regional competitors," said Wells Fargo gaming analyst Carlo Santarelli.