Pinnacle Entertainment reduces first quarter net loss

Las Vegas-based Pinnacle Entertainment, Inc., which posted a first-quarter net loss but increases in revenues and cash flow, said Tuesday that it expects to open a $368 million hotel-casino in Baton Rouge, La., by Labor Day while proceeding on expansion projects in St. Louis and at a racetrack in Cincinnati.

"The company continues to make significant progress improving its operations and executing on its strategic objectives," Pinnacle Chief Executive Officer Anthony Sanfilippo said in a statement.

While the L'Auberge Baton Rouge is the company's most visible expansion project, the outcome of a statewide lawsuit over slot machines at Ohio racetracks is hanging over the future projections.

"We think (L'Auberge Baton Rouge) will grow the market and take significant share from the two existing casinos in the market," Janney Montgomery Scott gaming analyst Brian McGill told investors. "The Pinnacle property should be higher quality and will be in a location closer to the population base, rather than downtown."

Pinnacle said its net loss in the quarter ended March 31 was $1 million, or 2 cents per share. A year ago, the company reported a profit of $2.4 million, or 4 cents per share.

Pinnacle's first-quarter net revenues rose 4.6 percent to $293 million while cash flow, reported as pretax earnings, grew 19.2 percent to $74.6 million.

The company said growth in results from its two St. Louis-area casinos, the L'Auberge Lake Charles in Louisiana and at Belterra in Indiana, as well as a decline in corporate overhead expenses, boosted results.

"We find Pinnacle an attractive and concentrated play on a consumer recovery within the regional gaming markets," Credit Suisse gaming analyst Joel Simkins said. "While PNK has demonstrated strong margin gains, we believe there is additional room in Lake Charles and St. Louis."

Shares of Pinnacle gained 10 cents, or 0.9 percent, on Tuesday to close at $11.20 on the New York Stock Exchange.