Profits decline slightly for Pinnacle in the fourth quarter

LAS VEGAS -- Regional casino operator Pinnacle Entertainment, Inc. saw a slight decrease in profits in the fourth quarter but made progress toward its planned real estate investment trust spinoff, the company said Thursday.

Pinnacle said its net income was $14.5 million, or 24 cents per share, for the quarter ended Dec. 31, down from net income of $14.8 million, or 25 cents per share, a year earlier.

The company’s overall revenue for the quarter increased 3.6 percent to $554.3 million.

For all of 2014, Pinnacle said its net income was $43.8 million, or 71 cents per share. Overall revenue was $2.21 billion.

In a statement, Pinnacle said it asked the Internal Revenue Service for guidance on technical tax matters related to its proposed real estate investment trust spinoff.

The company said it would reduce the equity financing needed for the spinoff to $700 million or less compared with the previously announced $1 billion. Pinnacle said it expects to complete spinoff in 2016.

“We expect this to be viewed favorably,” Deutsche Bank gaming analyst Carlo Santarelli said. “The new estimate is roughly in line with our forecast.”

Las Vegas-based Pinnacle operates 15 casinos in eight states, including two casinos in the Northern Nevada community of Jackpot. Pinnacle also owns part of a racetrack near San Antonio.

Pinnacle CEO Anthony Sanfilippo said his company’s flagship L’Auberge Casino Resort Lake Charles in western Louisiana was helped by the opening in December of neighboring Golden Nugget Lake Charles, saying it would “enhance the broader appeal of the area. So far, the Golden Nugget has had a positive impact on visitor and gaming volumes in the Lake Charles market,” Sanfilippo said.

“The initial increase in guest visitation supports our long-held view that the market would grow substantially with the addition of a high quality gaming entertainment resort.”

Sanfilippo said gaming revenue at the property “declined modestly in December,” but visitation, gaming volume and hotel occupancy increased. He said January’s gaming revenue, which will be included in the company’s first-quarter results, was up 5 percent.

“This momentum has continued in February, and importantly, we have achieved these results in conjunction with an improvement in profitability,” Sanfilippo said.