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Howard Stutz
 

Pinnacle Entertainment Reports $2.2 Million Loss

4 May 2005

Three weeks before unveiling its most ambitious project, Las Vegas-based casino operator Pinnacle Entertainment said Tuesday it increased its year-over-year quarterly revenues but suffered a loss in net income because of development costs and early debt retirement.

Pinnacle, which on May 26 opens the $365 million L'auberge du Lac, a resort, casino and golf course on 227 acres in Lake Charles, La., reported a net loss of $2.2 million, or 6 cents a share, for the quarter ended March 31. That was down from a profit of $1.4 million, or 4 cents a share, from the same quarter a year ago. Advertisement

Total revenues for Pinnacle climbed 4.1 percent to $139.8 million from $134.4 million.

Gaming analysts polled by Thomson First Call estimated that Pinnacle would have a break-even performance in the quarter that ended March 31 on revenue of $136.4 million.

Pinnacle Chairman and Chief Executive Officer Dan Lee said the company is focused on opening the new resort, located two hours east of Houston, in time for what is expected to be a busy Memorial Day weekend. Lee said the company received more than 40,000 job applications and has hired more than 2,500 workers.

"As our first-quarter results demonstrate, we have continued to operate well in our existing markets, with significant adjusted (cash flow) increases at various properties," Lee said.

The company also operates Boomtown in Reno and casinos in New Orleans, near Shreveport, La., and in Indiana.

Revenues and cash flow increased by double digits at both Boomtown New Orleans and Belterra Casino in Indiana.

However, weather in Northern Nevada hampered operations at Boomtown, which reported a 4 percent loss in total revenues of $16.8 million, compared with $17.5 million a year ago.

The planned opening of L'auberge du Lac is expected to boost the company's standing.

"We continue to like Pinnacle long term as the company's projects should provide significant earning per share growth as well as diversify cash flows so that the company is not leveraged to one particular market," Deutsche Bank gaming analyst Marc Falcone said in a note to investors. "However, we would expect volatility in shares going forward as investors focus on the upcoming opening of L'auberge du Lac."

Pinnacle is building two casinos in St. Louis, including one on the Mississippi River near the city's famous arch.

Pinnacle shares fell 48 cents, or 3.16 percent Tuesday, to close $14.70 on the New York Stock Exchange.